However, I will still be required to pay income tax on the income generated from my private lending activities.

AKA Work-ready.I purchased the home with an FHA loan, and my original contractor (as required by FHA otherwise I wouldn't have used one) underbid the contract not understanding the inflexibility of such a loan.

Banks will require that you hire a licensed contractor. 

There are still areas where you can buy units for $200k/ door but they require a lot of work usually and covering all operating expenses and interest payments can be challenging base on low-ish rent levels in some places.

If you are buying in a state that requires the prepayment penalty to be bought out, credit maybe isn't the greatest, it's a multifamily, etc that's going to affect your rate.

Some states require the lease to name the property owner as the Landlord and the management company as an agent for the owner.

This was after she agreed to my offer and the listing agent allegedly explained what was required to remove the tenants. 

Did you live a year in each one and then buy the next one to meet the primary resident requirement?

They may be able to help negotiate with the lender on your behalf or provide alternative solutions to mitigate the impact of the increased escrow shortage.Additionally, you could explore refinancing your mortgage with a different lender to potentially lower your monthly payments and escrow requirements.

will require a property manager IMO.Much success