Will the title company put this property under our LLC name, and won’t be required to legally inform HUD/tax authorities. - will it influence property taxes once we move to conventional loan in 3 yrs? 

This is something their screening probably would have caught, or their system would have a legal procedure to deal with it.

We have about 5 percent of tenants who had valid covid issues.

The real prohibitive costs come from the legal, compliance, and reporting requirements of registering a security.

It is a separate legal entity.

I am assuming short-term rentals would be legal in the municipality.

I remember years ago our attorney reviewing one such issue for a client that was coming over to us. 

Note that legal and transfer costs are not deductible but can be added to your cost basis.

Many times the tenants are income based and pay 20-40% wherein only 60-80% may be guaranteed.Aside from the rent percentage issue is pride of ownership.

All existing STRs with 2 days rented in the last year will be granted legal non-conforming status.