A number of our offerings are secluded; many vacationers are looking for that experience.

INstead of just saying "no" we asked them to check with their credit card company if they offer travel insurance yada yada.. we got a 5 star review form them without giving a refund.

This might give a one-time (non-scalable) boost to cash flow, offer multiple value-add options, and allow the house-hacker peace of mind, via the assumed mortgage, in long-term breakeven or positive cash flow in the event that the value-add plans end up not being executed, and/or the person has to move out, and rent by the room or STR become unavailable for some reason at a future date.

However, if you can identify a reinvestment opportunity that offers significantly better returns or aligns with your goals, selling through a 1031 exchange could make sense.

I will also have my agent there with me to offer comps to aid in their appraisal if they are receptive to it. 

If you own 25%+ of the business paying your w2, youre still self-employed.There are bank statement/1099 loan program as well, which is what you have been offered.

They would offer a more hands free approach, but eat up the profit in return.

See what other controls they offer.  

You have to offer a great product at a competitive price in this market.

Doit in good faith, thus if they offer his magical number, take it.