@Aaron Smith,This is definitely a pretty specific scenario, and I think the Appraisals issue (and finding a Lender that won't require them) will actually be the biggest deal breaker.However, I don't think I'd let that stop you from investigating a specific Lender's options, since even if the properties will appraise for well under their fair-market ARV, a Private Hard Money Lender might be willing to work with you.We've even seen deals in hot markets get funded at >100% of the Purchase Price or As Is Value, based on a higher ARV & knowledgeable Borrower that still inspire confidence in everyone seeing a healthy profit.Your biggest assets will be the free & clear properties, and the existing rental income.The biggest potential issue I could see would be if your existing debts will require too much to pay off with the new Blanket Portfolio Loan, that you end up with not much cash-in-hand after paying everything else off.It's an interesting question & scenario, so I'm happy to discuss further.

Questions for the Forum:1) Are there any major pitfalls I need to further investigate or be aware of?

While I am not a fan of entering into a deal then backing out and suing, some of your claims need investigating. 

How can I better investigate this?

It may all be manageable depending on your willingness to investigate and then your willingness to tackle the problems.Your response to the inspection will depend on if you’re all cash or not.  

When I investigated that with the property management company, the president of the company claimed that when they first took over management of the property there was about $500k in debt and over the years they’ve slowly been crawling out of debt, and that $86k is actually really amazing considering where they came from.

A lot of them will be discovered when you conduct a more in depth investigation and during the due diligence process.I will provide a response to each of the 15 items you listed.  

What you’re proposing is something I need to investigate and make sure I build toward regardless, taking into account any requirements like dividing wall rules, placement of utilities, etc.Any chance you know if there are property tax benefits to keeping them together?

Since Jan 1, there have been 9 shooting homicides (pretty much all gang related), 15+ shootings (most appear to be gang related from initial investigations), and a bunch of car thefts (had a recent one month stretch that had 25 thefts).I'm sure this will affect the local market a but as potential buyers would see this and be turned off right?

Florida has some good STR areas though, It's worth investigating as @Jaron Walling said.