This way you have a free or mostly free refinance from a cost perspective. 

Costs include a conversion fee, potential property upgrades, and legal expenses.

Thank you for breaking down the cost for me.

This will cost you money on the back end.

Cash for keys, screening, and lease enforcement seem crucial, no doubt.I’m curious, though—I've been in rooms with pretty successful multifamily operators, and many of them actually frown upon eviction because of the cost, lost rent, turnover expenses, and time.

I was a Dave Ramsey guy and that probably cost me millions.

it ignores (1) all the costs that have to be expended simply to process a transaction, and (2) the higher maintenance costs you will be incurring in that type of neighborhood. 

Recently, I conducted a cost segregation study on the property shortly after converting to a STR (converted June 1 2024), and I want to ensure I file my taxes correctly and legally given this change in circumstances.

Assuming the loan would likely be best from a cost/fees (and likely interest rate perspective). 

Those holding cost will certainly add up over time and kill any cash flow.