The only thing is I've been working so hard on getting my credit to be over 700's but now I have no money for the down payment and closing cost due to paying down credit card debt to avoid interest.

The issue is they are super soft, and one storm will break it down the middle or at the trunk if it's still small- avoid this one! 

We have talked about purchasing the property as a second home, but would like to avoid that if possible as the down payment is higher and the rental strategies are different.Does anyone have any advice/experience with this or anyway around this situation?

Interest rates are still low, I'm assuming you would be able to swing the 20% down to avoid PMI, and qualify for a pretty affordable fixed rate loan product.

So I am trying to avoid capital Gaines taxes here.

In CA, for example, brokered construction loans are required to be fully funded and escrowed to avoid the draw money from disappearing when you need it.

Tenant shall pay for all costs associated with remediating pests from the Premises and shall inform Landlord at first sighting of any pests in order to avoid any infestation of pests.

If they really don't have a hardship and are just taking advantage of the situation they may also be avoiding extra scrutiny with the assistance forms.  

I just read “how to buy & manage rental properties” and it stated it’s better to hire independent contractors than employees to avoid keeping their “own records and paying their own taxes.”

If you don't have the $ to avoid PMI, it is too risky to acquire multiple properties.