If the ARV has risen to $260k and you’re renting it out for $2900/month, you can likely qualify for a higher loan amount.Here are some key points to consider:Loan-to-Value (LTV): A typical DSCR refinance will allow you to borrow up to 75-80% of the property’s ARV, so for a $260k property, you might qualify for a loan of $195k to $208k, which could help pull out most or all of your original investment.Debt Service Coverage Ratio (DSCR): Since you're renting for $2900/month, the loan payment will need to be covered comfortably by that rent.

They have no cash to qualify for a rental or even pay for the move. 

Even that manager needs to be really hard worker and skilled in so many different areas...sales, marketing management, hiring, firing, reservations, computer skills, and more.   

I have not thought of using DTI instead of 3x the monthly rental amount in order to qualify an applicants income, but you made a great point regarding the priority that tenants might give a car payment.

Do you have an idea of the long-term rental amount, and would that be sufficient to meet the DSCR ratio needed to qualify for the loan?

The rules are more complicated than your one sentence, and even Tom did not have the time to explain all of them on his podcast. 500 hours is one way to qualify for material  participation, and there are other ways.

They can qualify for a new mortgage and show they are not the ones paying on the old loan so that the payment doesn't affect their DTI.

If you don’t have a large down payment saved up, don’t worry—there are plenty of options available . . .”A trusted lender will go over the various loan types with you, any down payment requirements on those, and down payment assistance programs you may qualify for.

You'll want to work with people who are highly motivated and skilled in their field. 

You can still qualify so long as you have verifiable income.