The barrier to entry seems high, and the price-to-rent ratio isn't very favorable.

one thing is your lending your money way under what private money should charge. unless your just doing your friends a favor..

I guarantee you are more likely to secure favorable terms if the seller likes you and can imagine you as a great operator for the business.

Your pictures aren't doing you any favors.

So I wouldn't be concerned about buying quite soon, as things are moving in a good direction...and all the more now that they've assembled a committee that reportedly includes some people who are both more experience with and favorable towards STR.

Negotiations focused on securing the property at a favorable price, enabling us to achieve a profitable margin in a highly competitive market without requiring additional renovations.

Here's the problem: They are not a sustainable asset for most to own; they are difficult and costly assets to exit through a sale; if you achieve favorable refinances, you may be able to use those funds to buy other (hopefully better assets) but are now faced with operating highly leveraged bad assets. 

I would not favor one or the other. 

Avoid PMI and then go to a local credit union and get a heloc after closing to gift the money back.Have this as a tool in your tool belt but pursue use of the 3.5% FHA, knowing that you will be at a competitive disadvantage if you are competing with non FHA buyers, then you can call in the favor from your gift person.Just know that if someone gifts you down payment money, your bank will require them to sign a letter stating that it is in fact a gift that doesn’t need to be paid back.

These properties can provide cash flow and diversification while qualifying for favorable residential loans.