I never heard of option 1 and I have been doing this for 20 years. 

can you go 1-2 hours out for a lower price point but retain the ability to be hands on?

Has anyone dealt with section 8 renters before and if so what are some red flags that I should keep an eye out for?

HH properties (and often HH clients) are high resource utilization accounts for a PMC, so many PMCs won't take them on, or will only take them on with the understanding that the property will be converted to a single-lease property (we do still use this approach.) 

Should I make this change? 

Hey @Chase Leibfritz, You can't do this directly.

., I definitely agree with the accounting piece, what are you thought on the legalities side of this.

Looking for some advice on how 1031 will view rehab costs/ ARV on something like this? 

Refinancing out of this interest rate to a lower one could be difficult currently but its a potential option in the future months.

What made you interested in investing in this type of deal?