Furthermore, what are the regulations regarding security deposit?

If it was built before, say, 1960 there may be a slew of electrical work you'll need to do to stay in regulations with current times and, of course, for the safety of a future buyer.

Additionally, I appreciate the note on Madison's strict short-term rental regulations for non-owner-occupied properties.

City regulations aren’t allowing for any more str licenses, but we could still rent it out as a 30-day rental without needing a license. 

Unless you can find somebody that isn’t concerned about all the regulations surrounding consumer loans … not suggested.

Before you are allowed to see an offering structured as a 506(c), securities regulations require that an advisor determine your suitability for an investment, disclose investment risks and give you a chance to ask questions.  

Also any STR locations that are viable options fron cash flow perspective and friendly regulations?  

It's a highly nuanced industry that isn't very regulated so you will need to know what you can and cannot do legally and then create some personalized guidelines around what you want to fund and what you want your returns to look like.

Nevada is a unique state in it has a lot of hoops to jump through for Hard Money Lenders to lend in (versus much less regulations in most other states) - not impossible to find by any means, but Nevada is going to limit your options

If we see an uptick in dual agency transactions, we'll probably also see an uptick in lawsuits and increased regulation around dual agency.