Competition is reduced as many aren't even looking at that size deal.

Split the $300K to purchase two additional properties in the exact location as our current rental, a similar unit, in the same building would now be $675K, and would significantly reduce cash flow vs. our current STR. 

This is essentially a buffer for error/reduced demand/the unknown.

If that's true, I would highly recommend building that reserve stockpile as fast as possible because even if this particular event goes smoothly, I can guarantee you at some point something is going to go horribly wrong and you are going to want to have the funds to cover whatever curveball you get thrown without needing to stress out about it. 

This will enable you to look for a tenant in advance and reduce your vacancy after turnover.

This created a lot of tension stress at the end of the project.

Good luck and don't stress it too much it will be a short term challenge for your investing career!

These remedies could include giving them the right to terminate their lease or pay a reduced rent.

I am sure dealing with a deceased spouse's belongings and trying to move is beyond stressful and painful.  

I could make more money with a different vehicle, but I'm not going to stress myself trying to make it happen.