Good credit score (800+) but low income ($70k)Candidate 2: Family of 5 (3 kids) with a business + a smaller dog (40 lbs bulldog) and ok credit (680+) but higher income ($130k) than other candidate. 

It also has low-entry price points where you can be all-in on a single-family house for under $100k and still cash flow.Happy to chat about my experience there or send some resources that might be helpful.

If you're planning to originate loans with a note rate significantly under market to help with home sales, you're not going to be able to sell them at par anytime soon and I doubt many private investors in your fund will be satisfied with the low yields that would result from the method you described above.

The seller says I can just deduct the repair cost from the tenant security deposit. 

@Marc ShinMake sure to double whatever they tell you it will cost and take 2x as long and then have someone to come repair all the shoddy work that was done.Hopefully you have working bathrooms otherwise you may have some surprises hidden behind your walls

Would love to connect with someone familiar with the area to learn about the market as well as costs of renting beach properties. 

That is relatively easy, but ZIP codes are a really poor way of breaking down the city as we have several that cover both expensive and low-income areas.

Outside of the that the monthly cost was more then the value provided.

Even though it's one loan (and if you use FHA financing a low interest loan at that) FHA parameters view it as you owning two properties - one your primary and one an investment property.When you sell, if you have met the residency requirements of the primary side you will get that gain tax free up to the 250/500K limits. 

The NV side in the north has simple regulations although a higher cost of entry.