It's been rezoned to allow a live/work component, allows 4 units, and the FAR allows room for plenty of additional SF. 

Additionally, I am aware that once I move out, I can list the home on VRBO and several other platforms to help boost bookings.The reason why I'm considering/leaning toward selling the house, is that when I begin to run the numbers, the expenses exceed what I could potentially make.

Not saying it can't work... just requires additional caution.  

I’m in no rush to move once I get into something, especially if it makes more sense to stay out for an additional year or so.

As OP said, hard to find umbrella that will cover STR papered insurance unless I find a carrier that writes it under my name personally and names the LLC as an additional insured (I own my properties under LLCs).  

The rent you receive will cover the debt for the home you're departing from . 

Aim to purchase and renovate a property for resale, with the ultimate goal of acquiring additional income-generating rentals.

Additionally, so far the economy has shown pretty strong resilience, with historically low unemployment rates.

The buyer can decide how to use the additional space.

Regarding Jonathan's point, it's crucial to evaluate the cost of these additions and calculate how long it will take to recover that investment.I'm a bit unclear about your living arrangements.