In your case, since you reduced the reported amount on the 1099-S to reflect the actual amount you received after the payment to the program, you might want to have the documentation from the county's request readily available.While it's not mandatory to submit the documentation with your tax return, having it on hand can be helpful in case of an audit or if the IRS requests additional information.

Additionally, I have been looking into section 8 investing around the area and does anyone know if manufactured homes qualify for section 8 housing?

That seller attitude is exactly what you are looking for in addition to being family owned/inherited. 

Downside is they're still slightly under market rent, with minor increases, but upside is I've spent very little.When they do decide to vacate I spend some money and get the rent up when I turn it over. 

Also, the home owner most likely has a mortgage and receiving a large amount of cash and then not spending it for 3 months can be more challenging than you’d think.

In terms of your questions about how much you should spend...that is super subjective.

I did spend a good amount of time looking into Pittsburgh and it does seem there is more inventory there.

Moncton is a bit more sprawling than Saint John or Fredericton and you will want to spend time getting to know the various neighbourhoods before you start shopping.   

Also, we see many posts from owners who spend their days on the beach because their PM's are doing such a wonderful job.

Yes, I would use VRBO in addition to other platforms.