If while asking the questions the loan officer says that the sub to property that you are getting ready to buy would become an issue then just close on the sub to property after you close on your refinance. 

Getting more mortgages does not help me with the two issues I outlined - spending less time on real estate and freeing up head-space.

It did find some serious credit issues with the first applicants I had, and some minor ones with the second applicants.

The Yale Law Journal article, "Zoned Out: How Zoning Law Undermines Family Law’s Functional Turn," highlights this issue, noting that while family law has evolved to recognize diverse family structures, zoning laws have lagged behind, potentially hindering innovative housing solutions like co-living.Challenges for Co-Living InvestorsFor real estate investors interested in co-living, these restrictive definitions can lead to:Legal Barriers: Difficulty obtaining permits or approvals for co-living spaces due to non-compliance with traditional family definitions in zoning codes.Operational Challenges: Potential fines or legal disputes arising from housing arrangements that don't conform to local zoning definitions of a household.Market Limitations: Reduced ability to meet the growing demand for affordable, shared housing solutions.Advocacy for ReformThe Bloomberg article, "Why Are Zoning Laws Defining What Constitutes a Family?"

As Stuart mentioned, there are several issues that might arise with the property, which could definitely impact your cash flow. 

Quote from @Jeff Roth: Hi Lina from Texas-Congratulations on your interest in investing in mid-term rentals and you are wondering how and where to get started.I get this question frequently from investors.Sometimes and investor is looking to keep their property cashflow positive as insurance and taxes have squeezed cashflow by turning units into mid-term or short-term rentals.First off, ideally, the property will cashflow as a long-term rental should something disrupt the mid-term rental model.You will also want to have the property be near where there would be a demand for mid-term rentals (hospitals, universities, research centers).Monthly rents for mid-term rentals are about 20% (+/-) higher than unfurnished similar long-term rentals.There are property managers that will manage mid-term rentals for you and I always advise my clients to use property managers to keep their investment as passive as possible and for compliance issues related to Fair Housing Laws and local regulations.To Your Success! 

Stock market-  it’s time for a 40 to 50% dive.Whether any or all of these come to fruition as an issue, just one of them would have a significant impact on REI.

Finding borrowers won't be an issue, so I wouldn't worry about that piece, just making sure you have an agreement you are comfortable with and borrowers and properties you are comfortable with.

The issue of "dreamers" is resolved.

There are several other issues with this; but just know at it's core it's an attempt at tax avoidance-not tax reduction.