It requires no MI and is available at up to a $650 loan amount (prior to COVID we could go up to $850k on this loan).The other program is a second mortgage that we can combine with either a jumbo or conforming first mortgage for aggregate financing of 90%. 

You combine this with large IRA and HSA  and health care premiums and my tax payment is a fraction of what it once was.This is great for tax but now we are ready to buy a new home and even though we have strong cash flow, excellent reserves/credit - tax returns are not showing the profit. 

Houston's cost of living combined with opportunities to invest are incomparable to most Metros, in my opinion.

I would specifically look for that combination of good rents and appreciation in the long run.I would not take more debt in your situation, and would not invest more money in the same place where you are based, since you said the price of your property decreased.Also, take into account that at this moment prices are very high, real estate prices (taken as an overall picture) have been climbing since 2012, so in my opinion is a good moment to sell but a very bad moment to buy property. 

You are in a position to handle the negative cash flow so that is not a concern.As you have likely already figured out, STRs have much higher operating costs (with PM) or take much more time (no PM), or a combination of the two, than LTRs. 

They fall in love with someone who's not good for them, or they settle for mediocrity, usually a combination of the two.

Another reason, and correct me anybody if I am mistaken, is that perhaps while constructing comps the owners and agents factor in sales of properties which were bought not for their cash generation as-is but because of zoning considerations that meant these parcels could be developed into something larger at a later date, perhaps in combination with properties and lots nearby that are already owned or were bought separately in different ways.

Unless there has been an extensive recent renovation, bump Maintenance and CapEx to 15% combined.

You could get questions from underwriting if you are combining your HELOC as the equity with a loan on the investment property. 

A key flaw your making in things is associating various markets unto each other, and things just are not that simple, the economy and GDP, stock exchange, commodities market, forex and real estate market have connections but are not tied unto each other and what affects one may affect another in various different degrees, or not at all. 08/09 collapse was a combination of bad speculative trading meet over-supply of real estate with a gravy coating of capital contraction.