So the monthly rent payments received will not cover mortgage payments, insurance, property taxes, repairs, maintenance, etc, and to avoid default the owner will be required to “come out of pocket” for the negative difference. 

Property Taxes (never heard of property taxes increasing if you convert a house into a house hack.

For primary residences, lenders typically don't require PITI (Principal, Interest, Taxes, and Insurance) reserves beyond the down payment and closing costs.

However, you could still have - cashflow on paper, but still break even or potentially have + cashflow on your taxes.

@Jamie Banks - That hasn't been my experience with my properties or with my midterm rental consulting clients.

Since we have zero income, I'm not inclined to pay a CPA several hundred dollars to do our taxes, so I'm trying to do it myself. 

This tax provision allows homeowners to rent out their space for up to 14 days per year without reporting the income or paying taxes on it!

Need advice if this is worth looking into.The property has been negotiated at a 20%  discount and 7.6% tax adjusted cap rate. 70% LTV with Freddic Mac loan.

LP is 280,000, ARV is 425,000ish and renovation is about 75 ~ 80 grands (+20 grands for closing cost, first year taxes, reserve etc).

Thanks, Tax.