Your rental house will look, smell, and sound like that within 1-2 months of them moving in.Now let's look at the common excuses for not doing this and how to solve the issue.1) What if they don't live in town?  

If you don’t know what to ask, you can find a list of informed questions in this post: Questions for Hard Money Lenders.In your case, I would also be prepared to explain your business model since condo hotels are not particularly common.

In my location this is not common as most low income people can't afford the 100K to 120K house and if they wanted to move into another location they would have to travel at least 25 miles out.

That is the common insurance structure we use when rehabbing properties here in Connecticut.

In a scenario like this, will the bank allow me to draw for soft costs? 

This is common in a short sale situation.

Are there any logs that are rotten or insect-infested (this is can be especially common with the sill--i.e. bottom--logs)?

@William JenkinsThe scenario you depicted would create UBTI for your IRA not you personally.

I thought about doing it, but I wasn't sure it was a common strategy or not

Unfortunately those have become common in this business.