As an IICRC Certified MRS (Mold Removal Specialist), I can tell you quantities of mold like that can cause permanent damage to your body.

I'm a producer/musician from Southern California. 

When we got our first STR (which was remote) we would watch it like a hawk on our monitoring systems, like it was our baby or something...but you just can't do that...you will drive yourself crazy and eventually you will need to start thinking of it as a income producing asset (with operating costs) rather then your second home. 

It's a great strategy, but it's not going to be a big cashflow producer for you regardless of where you invest. 

Friendly people, but not too many of themClean air & waterLow cost of livingCons:Finding good produce can be challengingTicksNo beaches (lakes are not the same thing)Low rents Hubby and I specialize in SFRs in our small town.

I know the interest on the mtg for the homestead would be about 2% less and I'd only have one closing fee instead of 3, but am I missing out on any tax deductions for the income that these properties will produce by doing this?

After 4 years from the date of lease terminate or date of eviction there is no more requirement at the end of the landlord no obligation nada to do deposit remittance letter etc.Tenants deposit was forfeited due to breach of contract it stated clear as day in the contract as such, but if they do request properly as mentioned in my first paragraph in this post then you are required to produce even if evicted you have to show them where their money went. 

It does produce a form called a K-1 that is sent to the IRS as part of your personal income tax filing.I would echo what @Tyler Weaver said and strongly encourage you to speak with a CPA.

Can a single-family home actually produce cash-flow in the future?

(Personal service includes the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, or any other trade or business in which capital is not a material income-producing factor.)7.