After analyzing the local Mercer County market I've noticed there are not that many MFH that are desirable meaning cash flow can occur, but appreciation, schools and good tenants will be at risk.

You would need to pay cash to do that or work with a local bank who will allow you to do that.

I am expecting a cash flow between $1200 and $1500.

I have been doing DSCR loans (back when they were called Investor cash flow loan) since 2013 or so.

Purchase price: $290,000 Cash invested: $45,000 Short Term Rental (Airbnb) What made you interested in investing in this type of deal?

It's REALLY hard for owners to cash flow paying a PM at all, much less 25%+.  

If it's working as an LTR and you are cash flowing, I'd be willing to bet that the juice won't be worth the squeeze in converting them to STRs. 

Pay cash and then after 6-9 months do cash out refinance. - in this case, I will have more time to shop around for better loan terms/rates etc. 

Ask @Dave Foster for any 1031 questions…But I’d start with these…Are you planning to pay all cash for the replacement property since it will probably be either impossible or expensive to get the loan in the LLC’s name.Why are you putting the property in an LLC?

Cash out refinances of existing properties might be a great option depending on how those parameters look within your portfolio.