I have called some local lenders (I prefer to deal with local banks if possible), but have not gotten very far.

Can you do this where you are or do you need to look out of your local area? 

The local govts aren't getting better they're getting worse.

You didn't tell us where you are located so it is hard to tell if you should try and find another place or not.If the folks are just willing to rent, then finding them a nice rental seems to be in order.

I am of the opinion that the best STRs are properties that don't compete with hotels - meaning that they are 4-5 bedrooms for large groups or have a unique location/setting. 

I didn’t see your location in your profile or your post, but assume at least 17% state/federal taxes leaves you with $10k/yr. 

They can take time with their search and be more selective about a property’s location and condition.

All situations are specific to individuals.Our best wishes and empathy go out to those LA individuals and communities.It’s been about 6 years since one of our storage locations was flooded for about 4 months.  2 feet over the roof.  

We bought a foreclosure and are living in it currently and are making it our forever home due to the location.

Running numbers, networking, and talking to local investors will boost your confidence when it’s time to pull the trigger.