Get out of your comfort zone.

Who can afford a rehab  bill 30% even 40% higher then what has been an exploading cost environment. 

That has always been the case and is not tied to the current interest rate environment.

Does the insurance company feel comfortable insuring in that area, does the lender want to lend on this property... and so on. 

This gives much better diversification protection across geographies, asset types, strategies, investment subclasses etc. versus putting all the eggs into one basket.The downside is that it's not for everyone, and a person has to be comfortable with turning over control to someone else.

I'm definitely out of my comfort zone and I'm afraid to take the first step. 

But be sure you find one that is comfortable working in the details of your target market.

But, I'm completely financially free and can live comfortably.

They both have some more strict STR regulations than I would be comfortable with.

If you’re not comfortable with your analysis and still want to pursue the purchase, I would recommend engaging the services of a real estate consultant holding the CRE designation and paying them for a short form report.