Applicants offering to pay extra are a red flag.

The current regs pretty much don't allow NOO STRs to be operated in any residential zoning.

Also, any insights on how hard it is to get a zoning change approved to make this a legal 3 flat?

Did you get red tagged?

How do you address inspection issues or red flags? 

I'm working up a business plan now would love some more thoughts and opinions.1) Who give grants for this kind of thing2) I have checked with zoning, I'm thinking about doing something like a Affordable daycare, Offices for Native American Council (Building does have cultural significance), Grounds for Pow Wows and redo the gym in there for community event. 

A property is considered legally non-conforming if the use complied with the zoning prior to the date that the town changed the zone to remove such use from the zone.

Though if personal use or long term safety are a concern it can make a lot of sense as Disney will always be a market (whereas places like Broken Bow I could see fading from popularity) and unlike many markets there is almost no regulation risk since these properties are built in tourist zones specifically for STR.I own there and manage others so have real world revenue data if you want specifics.

Red River Gorge, KY - 55.4%4.

Get out of your comfort zone.