I will get in touch if I decide to move forward on this.

Make sure you work with a lender before looking for a deal to ensure your buy box will get you a property eligible for financing. 

We are starting to get near max occupancy on this location. 

I would get rid of it due to the liability.Also who would be responsible for lugging firewood upstairs?

And if anything I'd see those things getting worse, not better. 

That's why these screening processes exist, if anything ever comes up like this and you get that red flag, and not everything aligns, if you're getting those red flags this early on, imagine what will happen when they are Planted into the home?

@CJ Moulton Be careful not to get "analysis paralysis" looking at demographic data for any market.

For an SBA hotel loan, the SBA may guarantee say 30% of the loan and a traditional bank takes the next 50%...total LTV/LTC of 80%...will vary by business but it's higher/better than the previous replies (otherwise, you would just get a traditional commercial loan without the SBA involved). 

And financing from what I've heard is very difficult to get.

Add in the social media gurus and I think expectations for RE investing can get skewed very quickly.