I explain that the fee is to cover costs when I mention the fee, and most applicants understand.I wouldn't sweat the issue.

Nightmare is probably the best description, and even after the blood sweat tears (and absurd cash we dumped into it), we broke even or lost money for years before finally admitting it was a massive mistake and ditching it to break even a couple years ago.All that said... we learned a TON, and we proved to ourselves that if we could make it through that we can make it through anything! 

Again, partner with someone who might want to offer their sweat equity into the deal.

But, I'm wondering if I'm really doing the smartest thing with my primary equity.I've considered renting out my primary residence and buying a "new" house to live in and perform some rehab/sweat equity on.

If you're able to finance the renovation in other ways (cash, friends and family loan, credit cards with 0% interest for 18 months, sweat equity) you'll usually get a better deal on the rehab, have an easier time getting your offer accepted, and have less headaches.There are two problems with the 203k loan in the Seattle-Tacoma market, and hot markets around the country:1.

We have built one heck of a business, bootstrapped and filled with our blood, sweat, and tears.

People don't need a house handed to them, they need to put a bit of sweat into getting it (and then make the mortgage payments such as they are) as well as being educated as how to take care of the home and budget. 

@Joseph Parker  Many of us learning valuable lessons at your expense (good for us, bad for you).Take your time and make them sweat a little.  

I’m a little nervous to make my first investment out of province, which  limits my sweat equity into the house/ being there to resolve issues.

My 'deals' were not so much at closing but occurred over time - sweat equity, self-manage, skilled trade network, rigorous tenant selection, simple/efficient work processes, slow growth.