Kieran, the best bet here is to refinance with a DSCR loan.

Since the rent roll was too low, she had to secure financing through a private lender that based the loan on market rent rather than the current rent.

Quote from @Vince Scipione: Standard would be an FHA loan for your situation more than likely.

Also, be sure to notify your insurance company that while you are still living on the property, you also have tenants. 

I knew the fire insurance would be CA Fair Plan.  

Did you close this with a hard money loan?

The substitute of collateral was more of a scenario where you sold for $155K, and instead of paying off the $88K loan in your scenario, those funds stayed at the title company and were used on a cash purchase happening nearby in date. 

There are some amazing physician loans available that can allow you to purchase a owner occupied single family property with 0% down. 

In many countries foreign investors buying rentals can't get loans or loans at all. 

😎Not that this small motel needs financing hopefully, but what would a loan look like on a heavier deal I wonder?