Most likely the new lender is going throught the foreclosure process and typically will end up taking the property back.The original posters chances of getting this property back now is slim to none as it will be sold at market value.  

I was told that the dilution of my original investment would be 21.8% if I did not participate.

Quote from @Roger Flot: I was reviewing some renovated listings in my area and one indicated that even though the house was originally built in 1920, because of all the renovations bringing the house to current code, that you could get 2024 rates on insurance. 

However, the depreciation claimed while the property was a rental must be accounted for upon the future sale of the personal residence, which could increase your capital gains tax liability.The adjusted basis of the property (original cost minus depreciation) will be used to calculate gains or losses at the time of sale.

The property took $350k to renovate, on what was originally a $210k budget, but we transformed it in to a gorgeous 4,500 sqft, 7 bedroom, 5 bath, luxury Airbnb.

I'm originally from the area and have been starting to look at some properties there as I am living in New Jersey.

The refinance step is where you pull out this equity, typically in the form of a cash-out refinance.Here’s how it works:You refinance the property at its new appraised value (after rehab and renting).You take out a new loan based on that increased value, ideally for the full amount or more than what you originally paid for the property.The goal is to pull out enough money to cover the cost of the original purchase and rehab (or even more, depending on the property’s appreciation).This allows you to recover your initial investment, which can then be used to buy your next property.5.

The main house is original (this place was built in 1924, very cool) and we rent it for $1,650/month.

My name is Cesar and I am originally from Puerto Rico but have been living in Virginia for over 20 years.

Paid 77% of the original list price on this new construction home.