Most agency lenders, Fannie/Freddie have been asking for 65%, knowing that there was problems on the horizon.You need to ask yourself where do you feel comfortable with debt levelsGino

First, a lot of people with Section 8 vouchers end up staying in the same neighborhood because it’s where they feel comfortable, where their family is, or just because they know the area.

Are there any lenders that anyone is aware of that would feel comfortable lending about 325k for a 5 unit property?

Ensure the STR’s projected income comfortably covers new debt, even with conservative occupancy rates, and maintain reserves for market changes or vacancies.

There are so many rentals in the area, probably on shared wells, so those people have either decided the STR use is okay or they are comfortable risking it.My intuition is that any actual disagreement over water usage could be handled with the other owner; but the risk would be if the other owner just doesn't like the STR and wants to use the well agreement as a reason to demand it be shut down.Any advice would be greatly appreciated!

An expense is relax deductible.

Or they need to move to a cheaper city / state where they comfortably afford.

It all comes down to picking the right areas that work well with your personality and attract the type of clientele you feel comfortable working with. 

I'm more comfortable working within those parameters than others. 

And unless you have very deep pockets, you can't afford to be that much off....So as has been said....hire a very experienced General Contractor and have them give you a budget number based on your SOW, (plus they will find other things that need to be done that you will not have seen).On your succeeding projects, you do a budget yourseld first, then hire the GC and compare numbers.Then, eventually you will be comfortable going all solo...but it takes time.