I know of a bank that, in spite of the above, somehow interprets it such that they will not let ANYONE use a 401k loan, no matter what, even though that guideline is crystal clear (to me, at least) that you can (solution: I simply don't broker the loan to that bank if that's the scenario we are working with, and I'm not even going to waste time with them if we're doing something along the lines of what is being discussed in this thread). 

A sharp seller's agent will simply counter your offer at that price, so you may pay more than was necessary.  

I've seen people simply fill in pools and it causes huge problems when it rains.

In my opinion, that's better because it's more passive for you AND there's an opportunity for upside (within 12-24 months) simply by leveraging the sponsor's expertise with forcing equity.

You also need to be aware that custodians are passive in nature and simply process transactions at your direction.

What if any of these negative scenarios are simply perceived by the other party?

I simply explain to the seller that I will be improving the value of their collateral.

The only way I see you being denied is if the property does not pass the physical inspection, which simply requires a clean home with no safety or health risks.

I personally don't like condos simply because of the HOA fees that kill most cashflow and because they can be restrictive.

I tend to buy in the Southern half of the US for 2 reasons:1) you get much higher year-round occupancy rates in the South & it’s simply tough to earn a good ROI in the North if your place sits vacant for a big chunk of the year2) Culturally, the Southern half of the US seems to be a lot more accepting of STRs regulation-wise.