I understand that completing long distances BRRRRs is a different kind of animal, so I am hoping to glean insight from investors who have successfully gone down this path.

Because of the relationship I have with the contractors I use, there is no material mark up when they source the material.Basically there is not an issue.The CSLB law on prohibition of T&M residential home improvement contracts has been around a long time.

In terms of material participation for cost seg I'm good there and meet the requirements. 

Typically you can only have one FHA loan under your name at any given time, but there isn't a limit on Conv so long as you qualify.

Data point: we have a long-term rental in a popular STR neighborhood listed through Zillow right now.Every person who writes asking to do some sort of arbitrage is blocked by the Zillow platform.I don't even have to say "no thank you anymore."  

Renting it out long-term gives us a $3500to 4000 monthly, we could  rent out one bedroom to a nurse and the other to our daughter but still would be a negative.

So if you provide a good letter of explanation, then you could do more than the 10% as long as it falls within the 50% of the gift funds. 

The key is vetting your lender properly—asking the right questions, understanding the terms, and ensuring the numbers make sense for your strategy. 

Do you happen to have long term % of gross rent of combined maintenance/repairs/turnover costs/CapEx  ?   

How long ago did you buy this?