Theres too much controversy, too much regulation and too much supply in residential zones.

You may want to add addendum's and rules and regulations as part of the lease also.

I am thinking a simple family trust or llc will do it without SEC regulations and all the over sight a 506 has..

Your responsibility as a landlord is to learn ALL your state landlord tenant regulations before you rent to your first tenant.  

I just edited my rules and regulations so that the next tenant lease will include this feature.

I’m unsure of their regulations on short term rentals?

Death by regulation seems to be the goal.

Our regulations are also very pro tenant and to survive you learn how to bend the rules to the breaking point.

Also, this would be regulated mostly at the local level except for banking/insurance/etc, no?

I also get tired of having to explain that by "making a relationship" with you, I expose myself to litigation if I ever have to sue a borrower for a deficiency from a foreclosure and oh, let's not even mention the part about how I have to explain to my state and federal regulators, or my shareholders that I failed in my duties to maximize recovery and minimize risk of loss by selling directly to some invidivual investor instead of exposing the property to the open market....you keep digging.