Additional concerns: tax implications, risks, benefits, & any additional information especially involving paying the least amount taxes. 

As has been said, yes there is the risk that you don't find a prop that works and you lose the $750, though I don't hear stories about that very often (or at all).

I'm not risking bringing someone else's parasites, pet dander (or worse), odors, or bodily fluids into my nice vacation rental.

You must live in the home you take out a FHA loan on or you will be at risk of mortgage fraud.

This is more risk upfront but you continue to have more of a collateral over a longer period of time if need be.

So the $400K bringing in 7-8% is at no risk at all either.  

According to my insurance agent, the only additional insurance requirements from a “normal” four-plex is taking into account flood risk / insurance - no other liability concerns.I’ve never owned water front property myself, let alone rental property on a lake.

If so, even though I only have 13 nights booked am I at risk of exceeding 14 days?

None of my money is currently at risk.

Nonetheless, still a good cash flowing market...just need to keep your eyes open to the potential risks and be conservative on your anticipated rent.Anyhow, best of luck to you!!