Alternatively recognize the challenges of being cash neutral at high LTV, the benefits of no longer paying a LL rent, that rates may lower such that you can refi, that over long term there will be appreciation and rent growth so it will at some point have positive cash flow, etc and lower your initial goal of cash neutral. 

I suppose I'm looking for any advice on how you found an alternative to hard money. 

We could sell the old house and net at least $175-200k (after costs of selling -- this is a hot market) and would put that toward the new mortgage (reducing our monthly payment and interest costs).Alternatively, we can rent it at an amount that covers mortgage, taxes, and insurance, but not much more than that.

Does anyone recommend a deposit alternative insurance company?

I know that ADU's was an alternative to building from the ground up.

An alternate perspective from someone in a larger city market - I am hesitant to put my STRs on Google maps.

What alternatives would you recommend?

I would check and see if this is something your bank offers, or alternatively a lot of PM software has the ability to do it for a small fee too. 

As an alternative, I am requesting contractors to sign hold harmless and release of liability agreements.

Not saying it cant be done or you shouldnt, just dont bank on it being a cheaper alternative.