For our second STR, we are currently researching Sherman, potentially / ideally, a less expensive duplex that we could rennovate and self manage from Dallas with workers coming to the area in mind. 

It’s certainly going to be more expensive than if it was done right the first time but this can’t be a big deal in the scope of a full gut.

There is no additional "risk" on the note like a demand clause etc, but you have  extra expense in upfront one time costs and the pre-payment penalty that most programs are sold with if rates do drop as expected in the future.  

It seems your lender is a bit more expensive coming in at WSJ prime + 1.65%.

A scenario where you intented to hold but something came up like an unsolicited offer, higher expenses forcing a sale, change in demographics etc.   

I've had my share of expensive lessons.

Quote from @Travis Smith: Age 56 and retiring from farming and I’ve been very good at avoiding income taxes with depreciation and business expenses.  

I believe the competitors are more expensive with unnecessary features.

They are more expensive than conventional, but not by a huge amount.

Some markets can support that expense and others can't.