If he must attempt to get the low interest rates of 2021 on this deal, I suggest that he instead look for assumable loans.

I am from Iowa so our goal would be to use it in the winter months (dec,jan,fab) and try and break even off the income from the remaining months. 

My interest rate and purchase price wouldn’t allow for positive cash flow unless I charged an unreasonable rent—or put about $500K toward the principal, which isn't ideal.I’m a high earner, so I’m weighing my options:Take the loss ($60K-$100K), buy another house, and chalk this up to a hard lesson learned.Refinance, put more money into it, and rent it out long-term—even if it’s not immediately profitable.Invest my money elsewhere and try to make peace with staying here for several years.Would love to hear thoughts from anyone with experience in real estate, financial strategy, or noise mitigation.

Know that every long term lender will require a survey and if something comes up on it when you are trying to sell or refi, you could get stuck in hard money without an easy or quick way to get out.Is there a pre-payment penalty?

Rent is decently expensive, but whenever I booked the stay, the owner mentioned he was trying to sell the unit.

Try to reach out to them and get their numbers, but it’s not very likely to happen.

The lender is basing the amount they will lend on the income of the other STRs in town....I am trying to figure out how to deal with this...I really appreciate your time...Thoughts?

This way you are trying to get top dollar for it but are also going to be notifying those who have saved the property every time you drop the price. 

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

@Makani Donaldson as a PMC, can tell you that trying to go around a PMC and "Cut out the middle man" to get to the owner will just make your name mud in your area.Who's going to trust you?