Are there other issues I should be considering?

I almost typed "independently" but there is a nuance stopping me from that, the very issue we're discussing.If the two of you do not have other STRs, as seems to be the case, you only have this one STR to draw the required hours from. 3 material participation tests to try:1.

As a broker, I'm always trying to find the best deal for the specific client and property.If you are looking for local private money lenders, your local real estate investment groups might have some leads for you as well.Most institutional private lenders are going to need an appraisal/valuation of the property, and permits to be issued for the construction of the building (if your area requires it). 

It sounds like you'll be improving on top of a ground lease issued by the municipality. 

Just started cold calling with VA's a couple of days ago and we've run into one of our first major issues.

I'm not sure competition was the problem for you - sounds like it was more an issue of marketing and managing the lease up process.

I would talk to your lender - there might be state specific issues but I know alot of folks (myself included) that bought only in one name.

Main issue with house is the amount of mess left behind.

We've contacted Zillow for assistance, but the issue has not been resolved yet.Has anyone encountered a similar situation or have any advice on how to proceed?

Both long and short-term rentals are permitted, which would give you a ton of flexibility, especially if you'd like to come down and stay a couple times a year.