This way, you can continue scaling your portfolio, leveraging the benefits of owner-occupied financing while building equity in each property.It's a great way to grow your portfolio while taking advantage of favorable loan terms typically reserved for primary residences.

I believe you misunderstood your lender or they need to take some continuing education classes.

The property does not hit the 1% rule currently but I believe with all the continued development in the community that within the next couple years I can raise rent enough to hit the 1% rule.

Current zoning would prohibit the whole setup actually, but the building and commercial use are allowed to continue as-is because they predate the town's incorporation in 1993. 

But, the market has continued to rise and we got them refied and will actually be getting an additional 10k after closing.

I lived in the Tampa Bay Area back in 2010-2016 and it’s incredible to see the amount of growth that has occurred and still continuing everyday..Josh has assisted quite a few of my clients with their STR needs and I know that you are in great hands @James Thompson! 

Thanks for your continued input!

Second, more debt only works if you are continually looking to grow.  

It is a buy and hold investment property recently remodeled.current land approx $250Kcurrent home $250K - 300K Depending on your rental rate, you might want to look at the DSCR rental loans, the advantage to getting a loan vs. selling, is 1 you don't pay taxes on the loan amount, 2. your property continues to cash flow, and appreciate. 

I will always continue to research, however.