I live in Ca, this property includes a liquor license.  

Thus since in both cases you as a short-term landlord are merely providing basic services to your short-term guests (and receiving passive income in return), I would think this meets the requirements for Schedule E and I would think that you can report the income on Schedule E even if you don't own the property, thus avoiding the 15.3% self-employment tax?

Specifying your requirements will enable you to focus on homes that meet your objectives and help you narrow down your search.Finding the ideal property may be made easier by using a variety of sources, including direct mail campaigns, real estate brokers, wholesalers, networking events, and internet listings.

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The other options include: -moving into the property for a year to qualify for loan products such as FHA or conventional.

If a hilltop home was a potential purchaser's goal these are some estimates we got for professional work:Getting power to the hilltop will cost about 50-60k according to the local power company. 66k for overhead lines, 52k for buried (not including trenching). $3600 for a septic permit & design about 50k for sitework (very long driveway), though foresters have noted the potential for NRCS funding for road improvement and invasive species management (i.e. clearing the 8-acre area which has blackberry bushes galore) which we are in the very early stages of looking into. 

You have to run your own numbers but compared to a 203k loan the NACA lower rate and no closing costs were a slam dunk even including the potential 25k.

Does your lease agreement include verbiage that holds them accountable for issues like that? 

I would retract the document (hopefully you are using an e-sign technology to make it simpler) and create a month to month lease option with $x increase.

Creative investment strategies to achieve high-yield cash flow include short-term, medium-term, rent-by-the-room, nursing/retirement homes, etc.