You should have contacted NACA and got permission, they subordinate if you are doing subject property improvements. 

You paid $2m for it two years ago w/ 25% down (it was suffering from mismanagement and deferred maintenance), invested $325k in capital improvements, and it's now valued at $3m with an NOI of $195k (cap rate assuming $3m value is 6.5%).

You are correct hotel underwriting typically has vacancy built in for cosmetic updates but in this case it appears your improvements far exceed keeping the hotel rooms updated. 

Hello, I'm not the best source for design tips, but as a broker/ lender the biggest value adds that you can get on rehab projects come from improvements to the kitchen and bathrooms.

They're also focusing on improving roadways and infrastructures to bring in new businesses to that area. https://sanjuanedc.com/another-project/I do advise to look at each cities economic development sites.. they offer a lot of information as to what projects will be coming to those areas and it'll give you more or less an idea as to what city you'd like to invest in. 

Plus, if rates drop later on, your position will only improve.

Continue acquiring properties in promising markets to build your portfolio while keeping an eye on interest rates to potentially refinance your high-interest loan for better cash flow.Save capital to maintain liquidity, allowing you to act quickly when market conditions improve or unexpected expenses arise.

This gives me a good little pushFrom what i've heard, the biggest regret on people's death beds are "I wish I would have" rather than "I wish I hadn't"Mistakes will happen, learn from them and continue to improve.

Keep your budget in mind for quality improvements, check local regulations and manage pricing.

You mentioned the rents were below market rate...if you do the improvements/repairs needed, how sure are you that you could increase the rents?