I'm also concerned about the liability that I might be exposed to here by allowing what appears to be a business to operate out of my rental.

I’m betting on it.  

We own and operate a mid size REI and property management company in Marquette Co. (~300 units or so). 

I am betting you didn't put this (or the other ones) home on the market to then become the bank for someone who only has a couple thousand down and no credit instead of selling to a verified buyer, right?

It just might be a different strategy involved.Cash flows through refinance or sale or operating cash flow is the same in my book.  

She's not trying to be an airbnb operator.  

There is a lot of inventory in Jersey City, so compared to the rest of the state, there are opportunities there for good STR operators.

Lenders see all, including how little margin some flippers are operating on.  

A clear operating agreement from the start is key to keeping on the same page. 

Alt lenders will normally be higher on fees, rate and perhaps leverage at time of close but that's not always indicative of cash required to operate.