The house is $200k with 1619 sqft, built in 2019 and modern styled.

It's by a state park so the numbers provided by AirDNA show really good bookings for about 3/4 of the year (winter has more vacancies but we feel our cabin is a bit more modernized than others and will do fine - we won't be sitting empty for 3 months). 

You might also consider talking with different lenders and seeing which lenders will do a 401(k) loan that combines and FHA loan with the cost to rehab built into the loan. let me know if you have any questions, I am in Utah, and I’m trying to do the same thing but the only thing that’s stopping me is my credit score and financing the down payment.

You could do this again and again, rolling that small multifamily into larger and larger apartment buildings.From the stories I’ve heard about HELOCs, you could potentially wrap up all your properties under a single umbrella and borrow against the combined equity of all of them. 

For example each property may only be worth $200,000 and 10 of these properties are collateral for one $800,000 loan, while each property would be upside down and seem to be over encumbered but combined they are only at 40% LTV....

It has been a great rental, however, now the property needs to be modernized.

With that, once you move you can rent as is, or modernize the property and increase the value, getting higher rent.

Not a good combination.

I ended up remodeling the kitchen and removed a wall and put a beam in its place and modernized the whole house.

Most often there is one outlet per room in the older houses and this will not be adequate for a modern family.