Regardless of your choice, just remember that fear is part of the game and it's normal to have it but never let it consume you when the I's are dotted and T's are crossed, sometimes the only way is through so take courage and go on your way!

They could be owned by people renting a cabin and are not normally there.

Now I know it's competitive, but I'm curious from someone that has experience in the area if this is normal and actually what it takes to win a property there or if it's just insane to put 10% as due diligence payment?

The time and energy and money and resources you use to buy a BRRRR primary home you can find 2 properties to buy.I would suggest exploring...at least EXPLORE it first...buying a primary home with a normal loan, ask about "first time home buyer" programs, and if you do find a good property then BRRRR that one separately.  

You will get some sort of "normal" loan, for the sake of argument 20% down.

Your policy normally will only cover property you own. not property that belongs to someone else. 

In short, commercial, can get loan in LLC, but you may have to sign a personal guarantee and residential normally in your own name.

I'd say normally you see restrictions within condo buildings rather than SFH developments with HOAs, but it's always good to check for sure.

If it > 5 units they normally use income. 

You may want to hire someone to consult with to make sure you are doing everything correctly.The issues that I normally catch are people not properly allocating expenses to business and personal.For example, mortgage interest will likely be split between personal(part where you live) and business(area where tenant live).Furthermore, I often see people deducting the full mortgage payment when only the payment to mortgage interest / real estate taxes are deductible.best of luck!