It goes without saying that you should get the lease agreements as soon as possible so that you can have some transparency into the number of occupants, the rent, any agreements, utilities paid/not paid by the tenant, parking, storage, responsibilities like lawn/snow, expiration dates, special clauses, etc. 

Utilizing Seth's local market expertise, we quickly assessed the property's potential.

To comply, refer to your loan agreement and provide evidence of occupancy, such as utility bills or driver's license updates.Good luck!

If everything is fine on the legal / rental side of things I would stipulate in the lease that the large living room closet would not be allowed to be used as a bedroom and would need to be utilized in some other capacity i.e walk in closet.I understand no one can give legal advice on this site but guidance or websites to look over would be a huge help! 

I’m the meantime I was able to find a new tenant who has paid the security deposit, first month rent, and has scheduled utilities to be transferred to their name but no lease has been signed yet.

In its best year, 2023 it cash flowed $3,000 a month before increase in property tax and utilities have squandered it down to maybe $1,500. 

Yes - you should be able to find a lender that is "AirBnBRRRR" friendly - most DSCR Lenders will require the full 12 months of STR history but a few that specialize in STR can qualify less than one year, typically with AirDNA projections or some common-sense mixed underwriting approach

It is very common that they will subcontract out some of the more specialized work. 

My favorite one is make sure they transfer utilities into their name BEFORE you give them keys.

Is this a common phenomenon?