This loan would require you prove your income with tax returns, pay stubs, W-2's etc as well as the rental income on the subject property.

So if the delta on your savings versus interest costs is only 2%, and it appears you're a RE professional, your tax advantages will probably make that a wash meaning there's no advantage at all to spending all your cash unless you are just afraid of making a payment. 

Whether this income would qualify you or not would largely depend on how much you claim on your taxes and for how many years. 

The house rents for 1000/month right now 500 being the cash flow after insurance/trash and taxes. 

Insurance, taxes, repairs, maintenance, and management costs are all sky high and $300-400 below market rent is a sure financial loss.

We would like to take the equity and invest in a short term for some tax benefits. 

also where can I find lists of tax sales?

You will need to do a Tourist development tax application and a short-term rental application.

As hotels lose market share, these municipalities are losing out on hotel taxes and misc. revenues that are difficult to collect from the small mom and pop STR operators.

It is so fun to see their faces when they see the cash flow, tax deductions, ROI, Appreciation, that is possible from one property.