After living in the property for a full year, we have come to terms and accepted that this is not our ideal location.

We did not do this and still encounter less than ideal setup the result of our initial setup many years ago.  

@Elvon Bowman Do you have an example of the ideal property or a price point?

A 4-plex would be ideal and you could play around with doing 1 long-term, 1 mid-term, and 1 short-term, plus you, if it works on your area to upgrade your income.

., are all ideal in my opinion. 

Ideally they did not pay over retail because if they did they could easily lose the money they put into the property if the loan gets called.  

And even if you hire a property manager to take things off your plate, that process isn’t foolproof, as Gregory illustrates.Buying a turnkey property (ideally with a tenant in place), or opting for a syndication or fund, could be a better bet if you’re looking to invest outside California but don’t want to deal with the hassles of “landlording.”

Look for a local credit union that can offer a cash-out refinance once the work is done, ideally with minimal seasoning.

Ideally, I would prefer to capture their existing bookings after closing, by directing existing bookings to my new listing, but there are some dependencies/uncertainties I'm working through and would appreciate any advice or shared experiences here. 

Ideally a HELOC is used for less then a  year project where you can refi or sell to pay back the HELOC. 5 years is a long time, things can happen and if you reduce the cashflow on both properties you'll be increasing the risk and having thinner margins.