You're also not allowed to rent out more than 2 rooms under separate leases, though this is pretty easily worked around.This ordinance went into effect in the late 2000's ... look up Residential High Occupancy Permit for more info.Good luck.

Im pretty sure I wont need to pay states and federal tax but wasnt sure if room tax would come back to us if we had a loss that went beyond state and federal tax amount.

Pretty straight forward to do if you use Subject To and Wraps - look at the spreadsheethttps://www.biggerpockets.com/forums/600/topics/58...

My cashflow will be around $6500 initially, so my cash on cash will be pretty solid around 18%, give or take a percent or two when I get final numbers.The numbers on the PDF don't really reflect this strategy. 

I know there are a lot of worries but all business models have issues to overcome but with a great PM even the hardest issues are pretty simple for us to work through.I love REI so if you ever have questions or just want to talk let me know I love discussing investing.Best of luck!

I see some pretty bad reviews and a little concerned whether to purchase/finance with them or seek my own financing 

I have been pretty active in the Sedro Woolley area as a RE Broker over the past two months.

I've been given the opportunity to invest in a property flip - after reviewing the pro-forma and budget, I'm pretty happy with the numbers and the potential returns.  

Pretty sure it is listed as being a ton of 1bds too!

You can do that but it is pretty risky.