All in one loan/STR investment/LLC questions

[Brett Chandler]

Hey bigger pockets community, I'm pretty new to this so the simplest thing is probably for me to tell you my plan and have you guys, the firing squad, shoot some holes in it ;). 

We have about 500K of equity in my primary residence. We are cash flow positive from our W2 jobs by $3-5K/mo. Our risk tolerance is pretty low in terms of introducing additional monthly payments. We are thinking about converting our current 15yr mortgage into an All In One loan and tapping into that equity to purchase a short term rental. Then, using our W2 income as well as the STR income to pay down the line and repeat when there is enough available credit.

I am also wondering if we should look into starting an LLC. Is that an option in my scenario? What are the pros and cons?

Anything else I'm missing? I appreciate the expertise!