Regarding total potential loss, Umbrella is better.

If you reduce to $2,300 and are able to fill the property faster, yes, you are "losing" $100 per month, but even at that rate, it would take two whole years to equal the loss of the $2,400 vacancy month.

This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.While the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall loss.

STRs do not require you to be a REP in order to take losses against ordinary income.

In fact my last completed purchase (I am under contract now for a different purchase) was huge negative cash flow.  

I spoke in Raleigh, last April and think its a great place to invest.

Last year was back to earth; a glut of available properties drove the rates down for everyone and a drop in visitors also increased vacancies.

Some will slip through your fingers, sellers will ghost you, and contracts will fall apart at the last minute.

So just for the sake of confusion.As for the minutes, I refinanced several properties into a package earlier last year, and for the first time, the lender asked me for official minutes showing where decision was made to refinance and reasoning for the decision.

Just based on the info you provided I would take the loss and move on.