Thus since in both cases you as a short-term landlord are merely providing basic services to your short-term guests (and receiving passive income in return), I would think this meets the requirements for Schedule E and I would think that you can report the income on Schedule E even if you don't own the property, thus avoiding the 15.3% self-employment tax?

Most deals require a down payment and some sort of debt / leverage. 

@Elton Tate Agents are required by their board to change the status within 1-3 days, but many push that as it's not really watched.We don't recommend offering asking price. 

Renting out by the room can be tricky, but remember that your utilities will be used up a lot more the more people you have in the place -especially your water bill.I would have it in place that utilities are split equally between all tenants.

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I have a new rental and received a tenant application, whereby the tenant puts workers comp settlement to qualify for the income requirement.

I have been taught that some private lenders do not require money down.  

You noted your water retention is off site, so that gives you more buildable space. 

Rehabbed both apartments, new roof, siding, windows, furnaces, AC, and water heaters What was the outcome?

In Nevada there is a required sellers disclosure of any issues past or present with the house.