Dennis, I wish I was able to have grown up close with friends like yourself or even had that nowadays...WOW!

STR....I can only imagine the groups of individuals who will rent this house on a short term basis.

Ask family/friends to help boost the listing (likes, saves, photo scrolls) or even book it at a friend/family rate! 

I’ve mentioned it to people at work and some friends who are moving to the city, but my place is either too far for them, or they prefer their own space.

If you find a sublet-friendly co-op and it requires an "All-Cash buyer", there could be a good reason.The points you mentioned regarding co-ops are valid but do not apply to all co-op boards across this market.

Since you're selling the business and real estate to a partner/friend you will have some flexibility in value determination. 

Focus on undervalued neighborhoods with potential for appreciation and partner with an investor-friendly realtor who knows the area.

I’ve seen something similar with a friend in San Diego, who bought what he thought was a legal duplex.

They will also dictate the terms of the loan, how it's filed, qualifications, etc.However, if you mean PML as in your friends/family that have NO experience in real estate and just have money sitting around...then I would certainly to counsel you to lean on some type of mentor or other experienced investor in Houston on what to do. 

If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.DSCR lenders generally let you vest either individually or as an LLC.