Crypto is super volatile and you never know what kind of news or regulations are going to come out that will affect market i.e.

STR's are great right now, but if a recession hits, there is likely much more volatility. 

Is it avoiding market volatility?

Our thought with this strategy was to grow a large portfolio of low-income rentals as fast as possible to provide diversification for a volatile asset class.

I would much rather invest in my local area, but for a 3/1 (that was build over 60 years ago), your paying about $600k - no way I will be enjoying any sort of positive cash flow, along with the crazy market volatility.

the private placements 'low volatility' is just a delution. if there were a liquid market for limited partnership shares, or even physical houses for that matter, these investments would be just as volatile as the public traded ones lol. 

I'd avoid an arm just because of how volatile the market it and you're already signing up for 1 variable interest rate via the heloc, personally i think it's a lot of risk to carry 2 loans with variable rates securing the same property. 

Another issue on top of this is that rates have been super volatile all year and changing very rapidly, so any sort of post or thread would tend to be rapidly out of date so soon after being posted!

In that case, looking at placing a self-directed IRA into real estate - whether a rental or a syndication - or notes, or something else where you can be diversified away from the volatility of the stock market and have more control over the outcomes can be a great option.In an IRA you don't care about not taking advantage of depreciation, because the gains are not taxed in the first place. 

Next, as W.S. volatility grows and faith in returns decline, R.E. investments simply look all the more safe, secured and assured.