Initially I was planning on buying and holding to collect rent, now it looks like I probably will turn around and sell the property as is for a small profit.

Take a look at the prospectus and the share classes for more information.2) What that means is that after the fund makes a certain amount (called the preferred return, which I think is something like 6%, but you can check exactly) then Breit takes a split of the profits.

I'd imagine the profits on the first couple of flips will be weak and it will be tough to build enough momentum / capital to keep going.  

If you pursue getting your flip properties from a wholesale brokerage many of them have in-house hard money lenders!

With a smaller place, you are still dealing with the same number of people but for less profit per night.

I am also relatively new to the area, so I don't have a great feel for the local market.From what I can see, it appears to be highly competitive at the moment, and there aren't any turn key properties at my price point.For all the experience investors out there,If you found yourself in this situation, which strategy would you pursue?

They can make you a profit or destroy your place. 

It has been suggested to me that I retro a local building and after 5 years of profit, I can look int a build.

Property sold in 7 days, above asking price and the home was listed at the same price as the initial brokerage.These types of brokerages overwork their agents, pay less attention to detail and hiring, because if they don't, they'll never be profitable. 

To increase profitability, you do have options- just reduce the water usage by 30% or so.