I am certain we can share knowledge and resources. 

I suggest you look for clarity on what resources you can use or companies can assist in using a small piece of that equity as a downpayment on another high-quality asset like the one you already own.

I can be a resource to find these types of investments, LMK!

The reasons they identified will not impress the judge and you will win as long as you followed the proper procedures.There is no way to ensure that they won't damage the property, but you have recourse if they do.

STRs are difficult for a traditional LTR PMC to properly manage!

Point is, by your own statement you already have the best resource available, at hand, to answer all of this, and then some. 

Depends on what other resources he has, both financial and personal. 

Take ownership of your mistake and learn to do the proper due diligence recommended above😊

Also, there's the added risk of being compliant with federal regulations & state laws as well as properly assessing/vetting both the borrower and the property.

There a lot of templates online and Chat GPT would also be a good resource that could probably get you 90% of the way there if you gave it an example template and your specific information :)