It doesn't add layers of physical damage coverage or cover things that wouldn't otherwise be covered.

Our rates are 7-12%, with no down payment required.

Lending capacity should only matter to those with large borrowing needs and require large legal lending limits but that wouldn't apply to hard money lenders anyway.

Do we focus on flipping, (currently we have actually been trying to do this, but we physically can't find enough contractors in our smaller market <100K population to do that much work).

Lenders will lend the lower of the amount between LTC and LTV.Do you require an appraisal and survey?

If the back of the sofa isn't comfortable, they might be able to work on that, but it will require taking the whole thing into the shop unless it has removable cushions there too. 

With that they may be able to recoup from their renters insurance (hopefully you require this)  If locks are damaged and the unit isn't secure you would need to take care of that right away.

Not to mention staff, I’d check on the number required to stay up to ratio throughout the day, night ratio is likely lower than day ratio.

I'm being required to pay another application fee and then $600 application fee to hopefully get this approved by the Board to allow me to continue running the STR that they approved 6+ months ago. 

I'd start by giving all residents the required notice (usually 24 hours) and go inspect the units as quickly as you can.