Plus, the tax benefits associated with a personal residence and the limited equity requirements seem to make NY a no brainer for you. 

Then you pay them back with other funds over time using the annual gift limits.3.

@Peter Nikic , well, even with limited equity - a lot can be done here with FHA loans

They are in fairly good shape, but the kitchens have limited cabinet and counter space, and both the kitchens and bathrooms are dated.

Think of the it like a high limit credit card. 

I currently am employed full-time as a construction laborer in the area and at least for now have limited bills (car, rent, phone, groceries).

That way, it limits your out of pocket money.  

I think we’ll see some housing policy reaction to this (rent control, removal of occupancy limits to create more beds for people to legally sleep in).

When you hit the limit of what FHA will allow then you switch to conventional at 5% down. 

For that reason, I want to limit the property to short-term rentals only.With occupancy and rates provided by a local property management company in the area, I'm looking at, even with 50% occupancy the math works fine providing positive cash-flow, taking into account all the expenses (I used knowledge from the book where I learned about Bigger Pockets and this BP calculator).