It's a zero risk strategy that pays the same or more. 

Also looking for best practice guidance on the risk tolerance based on these numbers.

There will always be demand in the market (it's not like some covid markets that could disappear as vacation destinations almost entirely over the next decade), and the regulation risk is as near to zero as you can get in this industry so long as you buy in the approved tourist zones (again, compared to some smaller/less mature markets where they could outlaw STRs tomorrow).For short period cash flow there are better options. 

You have a mortgage on it so no one's going to go after you; you'll just need good rental insurance and (recommend) an umbrella policy. $200-300 per month isn't great, so make sure it really makes sense to keep it as a rental.

I say this with zero disrespect intended, but is the intense focus and obsession a normal habit of his as he dives into new interests?

Make sure you update your insurance policy.

Consider liquidity needs, inflation, and your risk tolerance in deciding the mix.

Credit card debt can be a double edge sword because after the zero interest teaser rate runs out, you really have problems.

Also, if you're working with a local bank, theyre likely choosing not to originate  Conventional loans for investment properties and to only offer commercial loans that they hold on their balance sheet, which are subject to their own internal credit policies.

Do your management deals give you your large stake with zero or very low capital of your own in addition to a management fee?