I think it depends on whole bunch of factors including your relationship with your parents and where you live.

Best factor in the cost to build the property as a total loss at year 20.

It looks like they are taking cues from recent regulations implemented in Arlington, TX.That being said, the success of short-term rentals (STRs) boils down to fundamental factors such as location, pricing, and execution.

@John K.Your DTI definitely factors into things, but presuming you have rental income from your houses, that gets to be applied as a credit to offset that debt.  

@Anna Brown you have 2 factors that give you a competitive advantage right now - low interest rates and a low tax basis.

This could be a significant factor in why housing prices are still so high.

Then the home was always used as a residence from time of purchase up until the last 2.5 years or so, which is NOT to be included as "non-qualified use", so the "Home" version should have 0 non-use days by the days owned, making my non-residence factor a big fat 0%, which multiplied by the gain makes my non-qualified use gain another big fat $0, meaning that my gain that is eligible for exlusion is 100%!!!!.......

If you're looking to buy value-add deals, a lot of investors I work with start doing BRRRRs with cash purchases and refinancing out so they don't have as many risk factors involved.If your market is seeing any kind of appreciation, I think it's smarter to leverage your money to get the bigger returns. 

More over due to fact it's just appreciation/equity play's, adding an amplification to that risk, and now with threats to active income, yet another amplification to risk factor. 

There are a whole lot of factors and differences among the options, even among lenders that fall under the "private lending" umbrellaSharing an article published last year that maybe can help and provide some more insights:https://www.biggerpockets.com/blog/dscr-loans-terms-to-know