They don't require employment verification, income or tax returns.

Even if inspections aren’t required now, that could change in the future.

Another thing to add is the regulations, HOAs and Cities are imposing a lot of regulation on short-term rentals or rent by a room, I have seen some HOAs regulate the amount of people authorized to rent the property too.It requires to do a lot of due dilligence to begin with mainly in such big house. 

She is required to disclose it.

If you have a real estate license, are you required to be "registered" or working with a broker or can you be licensed on your own without belonging to a brokerage?

The insurance companies might require this. 

Also, it can avoid filing an amendment.Another great point on eligibility- SEP IRAs require net self-employment income from activities like 1099 contract work, real estate sales, wholesaling, or other self-employment business income.Passive income as you have highlighted, does not qualify. 

Can they bypass this requirement if paying in cash?

However, some lenders may have guidelines on how soon you can move in, so it’s worth double-checking if they have any seasoning requirements before converting to owner-occupied status.Refinancing Options – If your goal is to eventually refinance into a conventional loan or an owner-occupied loan, be aware that most lenders require 12+ months of documented 1099 income for qualification.

Some states make it relatively easy to track down off-market deals, while others require a lot more creativity and persistence.