Lynn, This is a tricky situation but I believe that giving up a 2.75% interest rate is challenging to give up as we may not see rates that low for a long time.

You said it cost more to transfer from personal to LLC after the sale. 

I used a program in Minnesota to finance a small downpayment with a no-interest loan, then had a loan from my parents to fill in about $5000 of costs.

We just adjust our rents accordingly based on average cost of the water.

I fear if guest cannot at least have a private bathroom your rents will be too low.  

Our current rental was purchased for roughly $340k 7 years ago and is worth in the mid $500’s now and is paid off, and our primary was purchased for $430k 4 years ago and valued low to mid $600s and we owe $180k.Option1 we are considering are a fix and flip to provide cash for a down payment for a long term rental to allow the rent to cover the mortgage and at least break even.

This raises the cost of using an STR versus using a hotel. 

You could just think of the parent Series LLC as the ASSET HOLDING COMPANY and the traditional LLC as the OPERATING COMPANY.It would require extra costs, since you are involving the formation and operation of an additional entity.

For example, I am a little concerned about some aspects of the business cycle recovery and a potential for a double-dip so I lean toward the safest part of capital stack which is debt (or low-debt equity).

If it’s a completely separate unit in a multifamily, typically tenants are responsible for utilities to streamline your costs as much as possible.