(Gas are more expensive to buy, but cheaper to operate.).

So purchasing larger and larger properties allows investors like Benjamin to purchase more depreciable basis while continuing to defer and recapture.  

Hi Randall-Congratulations on buying a rental property well back in 2020.I am sorry to hear the property is now cashflow negative $200 a month.Your question is should you sell or continue to keep it with the negative cashflow.Depends on your personal goals and if being negative $200 a month plus any unexpected repairs or vacancies is affordable to you, but if you can solve the negative cashflow by turning the property into a furnished mid-term rental, for example, your future self may thank you.To Your Success!

The main reason for this is to continue to do medical missions around the world  even when I'm dead.

There is one quality operator who gets ~$50K on a house that would sell for $250K.

I'm also concerned about the liability that I might be exposed to here by allowing what appears to be a business to operate out of my rental.

You can check the NMLS for licensing (some servicers will operate without being properly licensed in that state).  

The provider I am using allows for 60 days of continued coverage once construction. 

Our handyman team of 2 are moving out of state after working with us for almost 18 years to start/continue their real estate investment journey in a more affordable state. 

I would continue with the STR in NJ.