But I also provide full management for a couple of others for 10-20% depending on minimum length of stay (since 30+ day stays require much less work for guest changeovers). 

In order to make sure you're optimizing your tax advantages and adhering to all applicable requirements, even while I can offer broad advise, I suggest speaking with a tax professional or accountant who is knowledgeable with real estate taxation.

As Stuart mentioned, STR in the Phila area, especially in Philly itself are not straight forward and require zoning and licensing requirements.

You didn't mention it directly above but I'm assuming you are planning on doing a 'live-in flip" in which case, yes, you should be able to get an FHA 203K loan (assuming you meet other FHA lending requirements). 

Are there regulatory barriers to this type of arrangement? 

I believe in many circumstances a permit or use license will be required by the municipality depending on the use. 

The former involves lower monthly payments but requires a lump sum at the end, while the latter has predictable monthly payments but might be higher.

The MTR strategy also requires a little more effort to source tenants.

It may require enough interchanging knowledge and interest in a long run for it to happen more often, maybe that's why it's less likely for now

Modern kitchens require 8 separate circuits minimum.Using licensed Contractors also I would assume?