Then get with your tax Person to find out what the cost of this type of setup will be, and also talk to your lender to see if this is going to put any restrictions on your borrowing.Good Luck! 

Investors connected and contacted me from BP the third week of May, frustrated with their STR search due to licensing restrictions, but committed to finding a coastal second home eligible for vacation rental usages before the end of summer. 

It’s like you used your money to cash out loan first (so no restriction). 

And Worcester needs housing and leaders look kindly on seniors and any deed restricted housing. 

Many lenders hare restrictions or guide lines on how long you have to keep the house in order to flip the house, while others have guidelines on how small a mortgage they will consider.

Although HELOC'S are available on 2-4 unit investment property homes, reduced Max LTV's, rates and amortizations can make $250k+ equity lines even more restrictive. 

There are STR zoning restrictions, you will want to research on those before jumping in. 

Quote from @Jeremy Greenamyre: If the goal is to incentivize housing construction, the federal, state, and local governments could also address the disincentives - environmental restrictions, "green" requirements, restrictive zoning, studies, etc.

Does anyone have any suggestions for how to get around these restrictions, or know which if any municipalities don't have these kind of restrictions?

Some lenders will require secondary appraisals, or a desktop appraisal, will want to see some sort of improvement on the property, and may have cash out restrictions.