Or take the extra 50% to save to buy a duplex or SFR to house hack.  

Just making sure that you're positioned in a good location with easy, quick access to the beaches is going to go a long ways and be worth the extra you'll pay for the home to be closer.

From a financing perspective, although rates are low, you must consider the extra overlays and conservative LTV's.

If you make $100 extra per month from her (or someone else), what is the return vs. just leaving it as is? 

So it's a bit of a gamble in my opinion as opposed to hard money loan,  and you better make sure you have extra good deal.

She obviously doesn’t want me to work since that could put extra strain on my head( I have headaches most of the week).

I think Lender is trying to secure some points upfront and providing you lower interest so that you can get more cashflow. that's my assumption ... is it 5% annually or he is charging you 5 points upfront plus extras?

@Sebastian Leit its a great idea, but I think we would have to pay extra for it as owners.

I have homeowners insurance (I bought in May 2020) is landlord insurance much higher or is it an insurance you add for an extra prime?

Once you have a contractor who is willing to do the work, what's a few extra pages).