I like the liability protection that comes from separating out the businesses.

No need to create a business entity, for those who are truly small (just be sure to beef up your insurance, if you don't have at least a properly run LLC, which will cost you a few hundred a year - the insurance is cheaper for those with one or two places and who own a house, cars, boats or have liquid assets other than IRA/401K -- which are somewhat protected).

States put real estate license laws into place to protect consumers. 

So, while you'll need to offer an incentive to a PMC to find suitable tenants and not just throw anyone in, you'll have to protect your downside somehow.

I'm also a member at the The Landlord Protection Agency which is an educational website from which I've learned much although I did buy a membership there I think there's quite a bit of free stuff available.. https://www.thelpa.comI love this stuff, and I believe there's no better way to generate real wealth.

Productivity suffers without collaboration inside a workplace.

In my opinion, most people will tell you to do #1, but I would do #2 so you can keep your heads in school and learn and grow inside of a safer investment with HOA protecting you from some of the major expenses that could come in a house hack.

It was about getting an insurance policy to protect you in case the bank calls a loan from the “due on sale” clause.

Is there a way to protect my deal here, or should I go into contract first? 

We have a 12 page management contract that we've added our real experiences to over the years, with the intent of protecting both us AND the landlord.