It's just a matter of finding reasonably priced options that others have not gotten to yet.Pensacola Beach has great rental potential and demand, but options are limited and prices are high.

Is banking on appreciation, refi (if and when rates drop) or potential rent increases wrong?

We feel confident in our abilities to make it work, but looking for input about potential pitfalls, codes, etc. 

I am running some numbers on potentially cash-out refinancing a rental house.

Start looking around at markets in your area and analyzing potential house hack deals to get familiar with the numbers.

That sounds like a solid plan but you would need to find a great deal with large value-add potential.

The single-family home would allow more comfort, while the multi-unit would allow more potential cash flow. 

Does the 10% pref with a 50/50 profit share seem equitable given the project's scope and profit potential? 

This feels like a major scam, but is a super nice looking property so I'm torn.

Both of these classifications work great for potential creative financing deals.