After all if someone is looking for an STR business and has cash, they will save a lot by buying an existing vacation rental.

With existing tenants, you DO KNOW THEM!

The projected rental income wouldn't cover the mortgage and HOA at this time.

With the situation you're going through, your first thought was likely "I'll raise the rents to cover this." 

Do you have any equity in you existing home (if you own it) so you can leverage a HELOC to use as an emergency fund?

Here's a good article about current inventory versus pre-Covid.

Since you only have 2 full time and two part time staff, who covers their vacations and sick time?   

Take the toilet out without damaging it, put a sanitary cover over waste hole, put toilet on shower floor.

We found it on a platform called Pre-REO.

At this point, instead of continuing to pay the interest loan payments on properties that we will never be able to financially finish since the rehab loans will not cover the actual cost of the rehab, I wanted to know the ramifications of returning the properties to the loan servicer, deed in lieu.