The cookie-cutter projects in Tulum have had lower occupancy rates due to various factors.

We should see rate cuts in 2025, so there should be relief on the way.

Pretty much any market right now is going to seem overpriced when you look at price to rent ratios and it's a rocky time to start flipping with rates doubling in a couple months.

The property is a great deal so I'm hoping to refi down the road in the event interest rates come down to a reasonable value, then maybe repay most of the personal loan at that time.

I'm looking to build a garage conversion ADU.

As others have commented - DSCR Loans tend to be a great solution for people in your exact scenario - fed up and tired of giant hassle and paperwork for conventional or bank financing - not worth the often pretty small benefit in rate or terms.Check out this article I published last year on BiggerPockets on what to expect documentation wise for DSCR Loans - they have become a nice blend between solid underwriting and doc sets needed, but not too much (and not too little like notorious "no doc" loans)https://www.biggerpockets.com/blog/what-documents-do-you-nee...

What’s the interest rate?

If I come across a flip where we could pull the majority of the money out, or keep only a reasonable amount in and the rents would cover the mortgage, I would consider it but I haven't really seen that here since the interest rates have been over 5%. 

Rehearse your approach and conversation so you know when to guide the conversation to a predictable outcome.

Initially renting is likely cheaper, but when you purchase with a fixed rate loan most of your expenses are fixed cost.