Still learning about how it works but this is my understanding today.We have decided to continue with this deal, due to the location of the property, the fact by licencing the extension and renovating the building we should be able to get a price increase from a buyer as a private home.

I'd expect prices to continue to appreciate, so the longer you delay, the more expensive things may be. 

To me STR and hotel caters to different groups of travelers and so despite competition as long as the travel demand of Hawaii remains (as you pointed out is a robust assumption) I think both will continue to do well.  

Huntsville, AL, showed—and continues to show—strong appreciation.

Will they continue paying market rent for a mismanaged property. 

Interest rates atm seem quite high so will ride this out a bit longer (and ratios will continue to improve over time.) 

I'd recommend the following:1) Continue to stay at home to save up more2) Buy the crappiest home in a good neighborhood, with financial help (parents?)

I'm sure the BP community would love to be continually updated as well on your progress.

Scaling up properties requires cash flow or equity, continuous education, networking, mentorship, patience, and persistence.

Focus on cash flow to align with your long-term goal of a remote ranch, and continuously educate yourself while networking to identify opportunities and partnerships.