The key there is "for the right price."

The overall LTV (including all 3 mortgages) will be key and your selling point will need to be that the 2nd mortgage ($8k) will burn off in 2.5 years (based on your surprise that it was even out there, I'd recommend that you follow up in 2.5 years and ensure that it's been satisified, so that it doesn't surprise you again in the future).Does the $8k grant vest over the 5 years? 

The LP investors think they must be missing some key item looking at all of the numbers so invest anyways.

What further analysis should I be honing in on and key factors/metrics/info that may be providing inaccurate numbers?

When it comes to stocking your STR with essentials, balance is key.

Bad customer service (from the partners), unprofessional client information management, ridiculously long underwriting, and I’ll add this..a low-key throwing of their loan officer under the bus for information “he did not know” or “must have been mistaken” about.

And what is your price point and are you looking for turn-key properties or something along the lines of a "fixer upper"?

(many contractors are going to bite off more than they can chew and communication will be key). 

While cash flow may be harder to achieve here, these markets often shine in their ability to withstand market downturns and provide solid appreciation over time.The key in markets like this is understanding your goals.

A good, solid PM will be key to your investing.