IE tenant or subsequent buyer defaults causes huge damage and your now faced with negative cash flow for a year and 20k to fix the place. if you can handle that its okwhat happens though is you have unsophisticated sellers and in a lot of instances the home is lost to the bank and the sellers credit is trashed.. plus many times they want to buy something else and with this mortgage still in their name they cant.its just a very risky dangerous thing for a seller. 

The reason is that the price range you outlined is likely to put you in C or worse areas and those can be very difficult to manage effectively. 

You should use either LLC’s (the old and expensive way) or a Series LLC (the new and more cost/time effective way).

Also how does this effect our landlord insurance?

Everyone kept saying it is hard to comp bc of the second house on the property, but the town considers it single family since the cottage was built before multi family zoning laws were in effect.

The only negative is that I have to pay taxes on it as hobby income.

Would there be any negative impact?

Through automation we are able to make our operations more cost effective and with the rise of folksonomy and the sharing economy, smaller scale operations are now able to compete on a marketing level with legacy name marks.

Both of their run-up in prices are different.  03-09 lots of 100% finance loans, negative amortization loans, pure speculation, and low rents, lots of new construction. 

I have never been involved on anything of this sort, how doable and cost effective would it be compared to buy/renovate,  any thoughts?