It's heavily dependent on what the tax code allows and who is interpreting the tax code.

Breakeven Analysis: I’ve read about calculating my breakeven occupancy rate, but I’d love to know more about how others in rental arbitrage set up and interpret this analysis.If anyone has a process or checklist for analyzing potential arbitrage properties, I’d really appreciate it!

Its growth rate is intimidating, and my personal interpretation of the data is that the market is actually still undervalued. 

I apologize if my post was interpreted to suggest that position.  

Am I interpreting that correctly? 

I would consult a lawyer and listen to his advice but where I would try to direct this is the lawyer write letter to HOA that they do not agree with the HOA interpretation that the current CC&R does not allow STRs.  

@Matt Lewis, it has been a while since I was working in the commercial world, but from my recollection, your lawyer's interpretation is the most common.  

I’d list it as a vacant at close single family with detached ADU, furniture negotiable and leave it up for interpretation from the potential buyers what they believe the highest and best use to be.

@James Wise When reading his reply, my interpretation is that he is not providing "property management", in his opinion.

If you need to modify the agreement, you need to keep track of the notices/addendums and then over time interpreting the lease becomes messy because the agreement is actually the sum total of ALL of those documents over time.