After getting my first few properties, I will likely go out of state (pending experience, comfort level etc).

Our prices are generally lower than Austin but wages are too.

I think If you find a way to lower your expenses you will essentially have more money to do flips.

Mostly low rents and C level neighborhoods. 

No bad debt (credit cards, cars, etc) and lower expenses.  

They will probably re-list with a lower reserve or send out for more standard MLS driven REO listing.

If your tenant's income level is high, this could maybe be worth it, but doubtfully so.

There have been a few times that I have suggested to a guest to just book another night at lower rate if they request this prior to booking.  

Laying out an effective tax strategy involves a lot of work at this level, so just be prepared for this to not be quick and easy.I'd start by first having a meeting with your current adviser and ask them to explain their current advice.  

I plan to gradually fix up the units and then raise the rent progressively until we reach market level which is around $425 for 2bd/1bth a month and $500 for 3bd/1bth.