A lot of times adding an ADU to a 4 unit property is not very attractive as you lower your buyer pool without necessarily adding much overall value since a 5 unit property is not value on comps and a 4 unit can sometimes demand a premium over 5 units. 

Make sure you include in the analysis an overall long-term outlook of supply vs. demand as the dynamics of the market might change rapidly.

Smoky Mountains is a good traditional STR market that probably has minimal regulatory risk compared to many other STR markets, and also has consistent demand as the area is pretty much built solely for vacation and hence vacation rentals

Potential Ownership Stake and Independence: I'm worried that if I start under a broker, they might demand a substantial share of my company, or it might be challenging to separate from the broker once the two years have passed if I was to become my own broker then.

Additionally, I assume housing prices are to rise (if they haven't already) once the rates start dropping.On the other hand, with the second option, I'll pay less interest but I anticipate a surge in demand as many others may have the same idea and wait.

How you treat the taxes is going to depend on how you and your securities and tax attorney set it up, but generally taxes are treated the same way, and assuming the LP structure, your investors get a K-1.The biggest difference, tactically, is in your marketing and investor demand. A

BTW...Selling a fractional interest is going to be very tough and the buyer will almost certainly demand a discount.

In other words, if based on the general risk of a LTR you demand a 10% cash on cash return, and or a total return on cost of 7%, then to be considered “a wash” a MTR should return say 13% cash on cash or a 10% return on total cost.  

Demand a substantial DP, non negotiable.

Taking a look at Airbnb/VRBO 30+ day stays and extended stay hotels as well may give you a better idea of demand as well