Your only real question here is how much additional equity can you earn before you sell before the rate resets and before you lose your capital gains exclusion, versus the opportunity costs if you sold and cashed out now.

Convert the Property to a Primary Residence: If you live in the property for at least two of the five years before selling, you may qualify for the primary residence exclusion, which allows you to exclude up to $250,000 of capital gains ($500,000 for married couples) from taxation.4.

Converting properties to multi-family is considered extensive rehab and those programs are a little more exclusive than the standard bridge loan programs. 

Don’t waste time with buyers/sellers/borrowers that won’t give you an EXCLUSIVE; if you do you’re competing with every other financial intermediary or broker and even if you’re successful probably won’t get paid4.

Has anyone been in a situation where they acquired a condo and operated it as an STR when the HOA did not make the exclusion in their CC&Rs, but then faced resistance from the HOA?

Unfortunately, many of these companies that do property management and brokerage services include exclusivity clauses in their contracts which I don't think is right.

I figured the term would be exclusively licensed but I may be mistaken. 

Can I choose to pay half of the deferred capital gain with the 2025 tax return and half with the 2026 return given that I would capture the 10% exclusion of capital gain with the 2025 tax return and won't be able to capture more before the deadline of Dec 2026 (unless congress decides otherwise).

Property manager had pest control come and they mentioned “partial exclusion” on an invoice, and calling the pest company I found records that they sealed up those drains.

This is why it is important to have appropriate insurance and even more importantly making sure your actions are not listed under exclusions in coverage.