It will include a compact bathroom, a tiny kitchen area, and a heater—just the essentials to make it comfortable for someone to stay in.

While great for cashflow, may limit your exit stratgy.Also, How comfortable are you with the offer as well as the overall numbers on whether this will or will not cash flow? 

This gives much better diversification protection across geographies, asset types, strategies, investment subclasses etc. versus putting all the eggs into one basket.The downside is that it's not for everyone, and a person has to be comfortable with turning over control to someone else.

- This ties into the previous question a bit, but we have around $70k that we could be comfortable deploying into this if we find the right deal. 

Off market deals usually have nonrefundable deposits and a clunkier process that isn't as suited for out of state people until they have good contacts in the area to evaluate the property (mostly contractors that feel comfortable evaluating projects for you).

However, consider STR seasonality, local regulations, and management demands, and ensure your equity loan and new primary residence costs fit comfortably within your budget.

You have to walk home, and feel comfortable.

Depending on comfort and cash, it might be a viable option as you can build equity and then sell without having capital gains, assuming it's your primary residence and you've lived there for 2 years.

Other most common factor: Family Size increases due to marriage or having a child. 

It's very unique and I think would be attractive to guests looking for a comfortable get away in the mountains.