From my understanding, as long as you intend on doing a STR when you close, there are no rules against changing your strategy after closing, especially if you find that something else is more profitable.So in our case, the lender determined an STR would bring in ~$3500/month (with all of their conservative factors), but now that we operate it as a huge 3300 sqft Co-Living property, it actually brings in $7000/month.

My underwriting is a bit more conservative than yours (and yours is more conservative than most I see).  

Look for properties where you can add value with smart, targeted renovations rather than going overboard.Financing Strategy: Since you're aware of the leverage risks, keep your financing options flexible and conservative.

Lastly, make sure to rework your numbers on the conservative side. 

Am I underwriting conservatively, accounting for higher interest rates, inflation, and potential market softening?

I think it works very well, but it is a very conservative strategy too.

Conservative, aggressive.

Lenders that don’t require an appraisal will perform a desktop appraisal but will typically have a very conservative view on the value of the property to protect the company’s investment.

I would say the cash flow would go up every year and that would usually be the case but my son will be moving into one unit probably for just the labor to rehab the last unit (collected rent will go down for a year).After that rehab is complete, at market rent I would have about $8k/month cash flow with underwriting that most would consider conservative (for example $1200/month allocated to maintenance/cap ex). 

This can be less I just use this as a conservative estimate because the math is easy.