Would your STR business even exist without Airbnb?  

He didn't even do an assumption here...with an assumption the lender knows the property is being conveyed and the new buyer is assuming the existing mortgage which is a lot less risky for both the buyer and the seller.

I will potentially move into one of the units for some timePurchase Price: $1.98MAssumable Existing Financing: $1.18M @ 3.48% ($5,563/month) Seller Carry: $300k @ 3.5% (5-Year Term)Down Payment: $525k (Buyer to Bring)Buyer pays all closing. 

I may have to get a variance for the existing dwelling unit's parking requirement, but I believe I meet all the SB-9 requirements.

I agree.. just look at any large mid west or rust belt metro.. there is a ton of houses avaliable the question though will folks buy in certain neighborhoods where inventory is readily avaliable you can buy existing in many of these markets for far less than new builds.. so to me its really a neighborhood issue  a school issue a crime issue etc etc..

I'd tell them to return it and buy one that uses the existing connection.

He's seen me grow to four units (3 properties) and I'm thinking, there's gotta be a guide or book that would help him just follow step-by-step how to rent out his existing property and buy a new one.

It looks like you can use a 203k loan for new construction to reconstruct on an existing foundation.

I know I can easily find a qualifying tenant who will pay $1,000 per month if I don't renew a lease with the existing tenant. 

So, if you put in 20K, you could set the bid up to the amount of the 100K total debt(80K existing + 20K additional) to ensure that the property reverts to you as the lender.