Long story short, probably a negative cash flowing property.

Being out of state, I would suggest vetting your "team", meaning find an investor realtor, lender/s (hard $ / long term), property manager, contractors, etc.

The smaller properties are still growing in terms of prices and rents - which have both gone up actually since covid. 

It might be just me... but I don't think long term rental might be the move here. 

I’ve been in the real estate business for almost three years now and have completed five deals: one buy-and-hold long-term rental, one short-term rental, and three fix-and-flip projects, for which I helped raise capital.

Your decision to lease this property for short periods is what makes this a short term rental property, not the property itself.

I would recommend that regardless of market you decide to invest in that you find a fellow investor/realtor that can help you purchase in the neighborhoods that make for ideal long term rentals.

It’s quite appealing as a long term investment - even at today’s rates.

Beautiful, but pricey—better for long-term appreciation than cash flow.

To make it simple…the investor is trying to buy your property Sub2 and needs you to refinance it into a long-term loan First.The investor does not have to ask the bank’s permission.