Thanks for all the feedback guys.I'd consider setting up consultations with the two awesome tax pros who offered advice here while following BP rules of not self promoting and reaching out to you about services.  

Their mentality was that the damage was already done, but that is not correct.

I can message you here with more details once they come.As the group grows I am creating a FB Group so as the group grows, it will be easier to stay in communication, while also posting on here to promote to interested people.

Hello,I have recently started shopping for lenders to have a cash out refinance for a second home in the Catskills.The home was bought roughly 10 years ago for $125k, we did about $60k worth of renovations and its current valuation is at least $250k.A family member with declining mental health owns the mortgage with $89k left to pay off at 5% and we would like to restructure so there are no financial ties left.Due to a spring fed water source, we have limited lender options.I spoke with a recommended local lender who claims due to us renting the home on AirBnB (we have a filed Schedule E for income on this property) it would only qualify for a commercial loan, subjecting us to a higher rate (5 - 5.75%) with variable rates after a set timeframe.Are we stuck with strictly commercial financing on this property? 

For all of those that follow the land geek and others who promote buying cheap tax sale desert dirt or FLA cheapo lots this is an excellent way to exit those properties at a premium price even today. 

This needs to be mapped out before you leave the house, just like buying a property needs to be mapped out with relation to your goal before you buy.The challenge with asking multiple people What is your best strategy is unless they have a clear understanding of where you are going you will get completely different answers and none of them or all of them can be correct.Take the time to sharpen your mental axe before you take that swing, be as detailed as you can with end destination (What your life looks like in 30 years as a result of owning real estate) and then work it backwards.

Trevis, my post was removed as "self promotion" (go figure), but I was offering to mentor you for free.Don't pay anyone for this.

Now I'm not saying to vocalize to the contractor that its okay to take the day of because you extended his schedule but mentally for yourself just prepare for the worst.

My main concern is that I think the 6% is really a promotional rate.

v=Fh9S1nMAUEMAdditional Open House promotional videos:https://www.youtube.com/watch?