I also think it is somewhat inefficient versus having our maintenance guy spend maybe one hour per building swapping them all out. 

And that since the loan is ARM for 5 years versus 30 years makes it less of a target. 

Versus Mission beach (San Diego) which is very much a party and people watching location there is no issues having the STRs in a multiplex.I suspect the answer to your question is location specific.Good luck

I agree though that individuals (versus corporations) buying 2-4 unit properties and renting out the other units at a reasonable rate is truly the best solution for housing affordability for both them and the community.A realtor can better advise on exact vacancy rates, but from what I've seen, it's not a huge concern. 

And not worrying about what you paid for a property.  9K out of your pocket today versus keeping that and having to wait through a couple of years of positive cash flow to free it up isn't a tough decision for me. 

But realizing truly what your goal is versus just buy buy buy because you have been told that is what a successful real estate investor does can be far more powerful than figuring out access to cash. 

Another thing to consider is possibly recording a lien on the property from an LLC (yours) and you as an individual are the borrower.Then you are looking at a rate and term refinance (higher ltv) versus a cash out refinance, but you would have to ask the lender if they allowed arm length transactions like this.

And be willing to wait for the right tenant, versus who comes along first). 

If the numbers aren’t in my favor, I generally prefer to wait for the right investment versus taking 10 years to recoup my money (10% CoC).

In terms of rate, several factors will come into play -- FICO, LTV, 30 year fixed versus ARM, etc.