I'm just exploring what possibilities might exist at this point.  

More importantly, how did the existing lender get away with it?

For our 4th once we are either going to put a heloc on one of the existing STRs, and use the cash to help pay for the next one or do a cash-out refi, and use the cash to get the next one.The other advantage this has is that if we are able to make an all cash offer on a home, we might have a better chance of getting the home in a hot/vacation market. 

I.e. if you go in anticipating a 10% yield upon stabilization and market cap rates are 5%, you can double your investment.With existing properties, it is the same: your projected NOI upon stabilization/total cost in project should be higher than market cap rates of the product.

It will be critical to determine if they intend to include an "amortization" clause, which will require existing STRs to come into compliance (or seek to exist) within a certain time frame.

I was thinking on adding a 4th room without adding sqft just to the existing sqft of 1500.

In this article, you will be able to get a good idea about whether it's better to build new or to renovate the existing property.

If the ask price is at full retail value of the existing condition, I would argue that the seller would be getting too much with that plus equity stake.

I am looking to replace the existing HVAC system in the attic of an 800 sq. ft. single family home that’ll require replacement of existing furnace and new ductwork.

My guess;   Distributing 401k assets to the existing operating LLC smells like the better idea.