If most people are flying to your destination, it's much harder to get 15-30 or more people together, and those larger homes stand less of a chance.While I've done a bit of research in Galveston, definitely not enough to answer your question.Another angle to consider if it's legal from a short-term rental and ordinance perspective, buy a home with a number of large bedrooms, and create exterior doors to each of them, put in a kitchenette with a microwave and mini-fridge, and rent them separately, in particular if most/all of them can have en-suite bathrooms. 

(I didn't take the final per my company's legal counsel.)

If so, what are the restrictions of the new property.

The downside, of course, is that the VA loan has a few more restrictions which can limit properties you can purchase which require more renovation for a lower price.Aside from the agent and lawyer, I would advise having a solid home inspector, CPA, contractors (general, painter, plumbing, electric etc.) on your team. 

Exactly what @Mark Hoover said...... how many horrible tenantts get virtually "evicted" but it never goes far enough to actually have a legal recorded eviction.

Legal beagle stuff. 

Now I'm thinking about selling and wondering if it is worth it to come clean and go forward with the city on making it legal vs ripping it all out and going back to a 1/2 bath?

Security deposit amountYou can find plenty of examples by searching for "tenant estoppel certificate doc" or exchange "doc" with "pdf" for more options.Here is an example and explanation: https://eforms.com/rental/estoppel-certificate/Some have a lot of legal jargon but this document does not need to be so detailed.

You should be able to get one loan, with three mortgages because of the three seperate legal descriptions for the lots.

Proper management infrastructure involves pay roll personnel on-site, with strategy/accounting/reporting/legal off-site.