I currently work in Richmond, Virginia as part of the growth team at a non-profit. 

Me either, but that’s just one of the benefit that SEC 8 offers landlords who participate in the program.....In low income neighborhoods, landlords are significantly better protected financially with a SEC 8 tenant than a non-SEC 8 tenant."

What are the risks of investing in a non conforming duplex and how like are they to happen

An appropriate strategy - particularly where you do not have land value to fall back-upon.    

In particular how does the realtor get paid if you are able to get a lease option agreement with the seller. 

If you are using 3rd party management this will be a non issue in most cases.

One particular strategy that interests me a great deal is short-term corporate rentals.

$3k in non-mortgage expenses sounds ridiculous... that's $36k a year.

Your friend is literally living below the landlord, one who's probably very particular about who comes and goes of THEIR property...

@Joel OwensI really like your idea about focusing on equity and rent growth and buy nicer new house.It is very hard to find good deals now a days, better to go with new construction home in nicer neighborhood.Do you recommend any particular Atlanta area or particular communities where we can find good new construction homes.