I’ve always wanted to renovate my investment properties, but it’s so hard to pull the trigger.

But it is the lowest down payment option, and likely the lowest rate option as well. one tidbit - condos don't usually like the STR piece, so make sure to do your DD in whatever area you're looking to buy in before puling the trigger. 

Can you ever use these funds as they accumulate to go purchase another property or does that trigger taxes?

I will be going down there in a couple of days, and interested in building/developing/investing, I am a licensed Mexican Architect, I have friends living there as realtors, US investors, and US builders ready to pull the trigger. 

Definitely wouldn't trigger the clawback penalty but it's still good to be aware of it.  

If this were a brick and mortar bank (now I switched to one), this would have been flagged to me before the bank took the action of refunding the money, triggering an investigation.

But how can you transfer a property into an LLC later without triggering the due-on-sale clause?

Since the property is under mortgage, just transferring to LLC will most likely trigger the "due on sale clause".3.

I have seen your posts on BP regarding Tulum for almost a year now and am curious if you pulled the trigger or if you are still analyzing Tulum. 

Even if the units you tour aren't the one you eventually buy, walking around the area and getting a feel for the property types will help you be a much more informed consumer when you are ready to pull the trigger.