I keep wondering about insurance, vacancy rates, if tenant selection is a bigger/ different factor, terms of the tenancy and differences in opex and capex? 

The new investment earns $24,000 a year, but the cost of the mortgage + the equity loan will be $22,332—and that’s before you account for taxes, insurance, maintenance, capital expenditures, vacancies, etc.

Honestly if you are never planning on moving back to the house (or the area), you are not going to cash flow especially after you add in insurance, repairs and maintenance (assuming property taxes are part of your mortgage).You have a friend willing to buy it off market-double check fair market value and sell it to them.

Liability wise you should consult a lawyer, but it may be as simple as a waiver and proper insurance coverage.

Food cost, Insurance cost, Drinking cost, eating out cost are all going up.  

What are some strategies I should consider?

@Ashley Guerra  You've given a lot of thought to your plan and strategy. 

The detailed cost segregation study report can help businesses more effectively manage their assets.If assets don’t fall into one of the examples above, there are options such as a 1031 exchange, gifting them through a trust or other advanced tax strategies to avoid depreciation recapture.

It helped us formulate our strategy when we were starting to scale.Gino

I would speak to your insurance carrier to get more clarity.