If they acknowledged you had a verbal agreement before, just have them tell the tenants they made a mistake and sign a new lease with you as the landlord, same terms.

The numbers look great as-is, but I would feel much better knowing I might have more flexibility long term. 

But I was telling what I would do in their situation.Long story short, they ended up buying two duplexes.

I'm working on a short plat and will be building another house on the new lot. 

As I move purchase price and terms around as we negotiate, at what cash flow amount would you pass on the deal?

The government is the one providing the tax benefits, so therefore the government is allowed to set the terms of it.  

In any building that allows short term rentals, you will have a majority of the owners doing STR. 

Before you start asking any questions you need to get an idea of what you qualify for in terms of financing.

If those home is paid off and the equity is only needed for a short time, taking out a more traditional HELOC might make more sense.

We could take the money and apply some of it towards our personal residence to reduce the time required on the loan but there would still be a sizable amount of loan so it really wouldn't make a huge difference in terms of the length of the loan...not a great idea.  2).