All of this said, be sure to do your research on STR regulations first and find a STR friendly location.

My first impression is that your numbers in the current economic climate seem a little rosy.I also have friends that are builders and I try to stay in touch with them on costs as we mostly do "to the studs" renovations when we buy a place. 

I know in Virginia my friend had a similar issue (side-by-side duplex, though, not second floor) and he was not proactive, just warning them several times verbally.

Instead of having to enter personal info and upload an image of your driver's license for each Reporting Company, the Individual FinCEN ID allows you to input your personal data once and then link the Individual ID to your various Reporting Companies. 

I was envious of a friends big gorgeous fixers in Arkansas, and I reacted by over-renovating, holding on too long, getting over-leveraged and then 2008 happened and…well enough said.

Your returns could be increased if you are willing to rent it by the room to individual students. 

Now as I stated I'm not a agent but I do feel confident in this here friend. 

Quote from @Andrew Steffens: Sorry about your frustrating issue - Airbnb is not only guest friendly but most of the time they will be the one paying for damage so they are going to try to minimize you. 

Or you can sell it, split the equity, and go separate ways.I'm not a fan of borrowing from family/friends unless all parties are honest and everything is documented in a written contract.

Tenessee is another I was interested in initially since I have some friends that moved there and I hear nothing but good things.