Scenario 1: 5/1 ARMRate: 5.675%Monthly Payment: $5100Prepayment Penalty: 3/2/1Closing Cost: Broker Fees: $11,016 (1.25%)Lender Fees: ~$2,000Loan Fees: $600Plus standard title and other feesScenario 2: 30 year fixedRate: 7.375%Monthly Payment: $6086Prepayment Penalty: 5/4/3/2/1Closing Cost: Broker Fees: $11,016 (1.25%)Lender Fees: ~$2,000Loan Fees: $0Plus standard title and other fees5/1 ARM looks attractive but not sure if that's what other people opt for that for a STR property? 

That seems like an unlikely scenario.

As a region, the phrase “The Poconos” is linked to a wide variety of areas that have much of the same allure in common.

Is that common in your area? 

For your scenario, there are no one time close options for something like that, but I wouldn't do a 1 time close anyway because they are an absolute nightmare for clients and developers/contractors who actually want to get paid in a timely manner generally. 

On a Fannie Mae loan, your scenario has a major Loan Level Price Adjustment (LLPA) of 4.125% for a second home with a loan to value of 85.1% to 90% plus a hit of .75% and another for .25%.

Through agency debt at ~67%, pref equity from an institutional investor and common equity from our investor-partners.

If I get stuck with the storage cost in that scenario it is MUCH less than a $100 fine per day for a month ($3,000). 

One last thought applies to a scenario where there is a lot of equity in the existing home even if the developable parcel is excluded.

**Due-on-Sale Clause**: The existing lender could call the loan due when the property transfers ownership, though this isn’t common if payments are made on time.2.