You're right, if a property doesn't have a grandfathered license, the allowed short term "zones" are very few and far between.

If you want to scale your business, learn real estate and grow your investing portfolio faster due to higher buying powers in upcoming markets and you are in an area that doesn't meet your requirements...then out of state is a great option.Whether you invest locally or out of state, unless you are doing the rehab yourself, there is no difference.

Doesn't matter if you're 1 or 100% of GP side, you now have a budding track record.

For other newbies, this means that while it doesn’t help or really hurt us too much, about $200 a month in property taxes and $70 a month in homeowners insurance does count against us for qualifying.

I've dabbled in this market a little and $600,000 doesn't go very far in some places. 

It isn't rocket science, and doesn't need to be made overly complicated to work well.

Hey Tate, here's what my commercial lender @ US Bank uses for pro forma debt coverage calculations if he doesn't have 2 years and YTD historical data (basically, seller's schedule E's)Vacancy: 10% of gross rents, unless there is sufficient market data at the bank's disposal to justify lower vacancy rates for the type of asset in question, OR detailed historical vacancy data from seller.Management: 3% gross rents or actuals, whichever is higher, with property management agreement provided to close.Cash Reserves: 3% of gross rentsTaxes: Actual data used.Insurance: 3% of gross rents, or as shown by insurance policy.Operating reserve: 20% - 25% depending on the type of asset and amount of historical data provided.

The conversation about leverage shouldn't be brushed over.Positively leveraging an asset is much different than negatively leveraging that asset.Also, you need to factor in how much leverage you have with respect to how big your reserves are.Being 52 means you're half way home, I doesn't mean you're close to retirement.... or that you need to play it safe.

The tax doesn't go away per say but as long as you hold the next property or as long as any time you sell that investment property you do another 1031 exchange you will never have to pay the tax. 

So it doesn't seem like a good deal unless you can get it for $160K or so (assuming no PM fees) if you are about cash flow.