You might even be able to get out from under the built up tax liability.With your asset amount, maybe its possible to sell out / 1031 to a REIT, and still cash out leaving behind the tax liability. 

@Andrew Grimmett If a seller is hesitant due to capital gains taxes, consider creative solutions: suggest an installment sale (seller financing) to spread tax liability over time, a 1031 exchange to defer taxes by reinvesting in another property, or a structured sale for flexible deferred payments.

I just learned that builders risk and liability insurance coverage can cease once a CO is issued for a new build.

The right idea is going to be the bread and butter.1) Ideal location2) Quality properties over quantity of properties3) 1.25x DSCR4) Intention to hold no less than 8, but ideally 12+ years.5) Sufficient cap reserves6) Mechanisms to enhance cash flow(via alt investing or house strategies).7) Liability protection through no PG loans(if possible), LLC formation, property management and being a diligent landlord.8) Invest deeper, before wider.Now if you're talking where to invest, different information.

I'm also concerned about the liability that I might be exposed to here by allowing what appears to be a business to operate out of my rental.

Don't leave out tax liability. 

We have not disabled ours or converted to gas, but Tenant must sign a Fireplace Addendum stating if they use it, we require a higher renter's liability policy with us as additional insured, rules on wood, storage, use, safety, they pay for yearly professional cleaning each year they are there, etc.  

if you go about the process correctly, you can break free without liability.  

This is your finances and your liability.

There was an interesting journal of accountancy article on this recently discussing the potential liability for CPA firms.