The STR part plays no part in the valuation like @Patricia Andriolo-Bull said.I agree that 20% is pretty fair, but you could self manage it once you get things in order.

Others noted that the appreciation play could make it worth keeping, I tend to look more heavily on appreciation since real estate investing is more of a long term game.

FHA is unlikely to play nice in this situation.Bank statement loans might be an option for you.

The specific assistance organization, the screening of the tenant, the property, and the PM company that should be communicating with the tenant all play a role in the success of your investment in regards to tenants.

Plus, having a fully paid-off property could be a nice safety net if the STR market takes a hit or occupancy slows down.On the flip side, if you’re eager to grow, saving for another property could be the better play.

I don't think anyone has ever said anything about sheets, towels, Keurigs, wifi speed, tv stations, pack-n-plays, the games in the game room, the upgraded appliances, etc.

@Brady Ascheman To make the decision strictly from a Property Management standpoint you have to calculate your vacancy cost and cost to acquire a new tenant to know if a rental increase is even a smart play. 

When you go to sell, Montvale requires a certificate of occupancy so this issue has to be resolved in advance of a sale.Although I am not a lender, I assume you will not be approved for an owner-occupied mortgage on 5-units if it is a legal 4-unit without some type of mortgage fraud whether in reported rents, units, or another legal document or representation (very very large issue from a legal perspective with multiple arrests in the last year for anyone playing fast and loose).As far as the DCA, I would recommend coordinating your work with the city with the DCA.

If it's a long-term play, the potential savings on PMI with a conventional loan could be significant.Have you compared rates for both options?

Redeveloping into mixed use live/work/play projects has been the most common proposed solution the past few years in my area.