And just because they are new, doesn't mean they are inexperienced.

While I have not yet conducted the analysis, I know how to value the property if it were sold as a single-family home (comps, though direct comps will be difficult), but I am inexperienced with commercial properties. 

Any lender who tells you otherwise either has their own overlays on top of Freddie guidelines, or they are inexperienced.

The tea leaves indicate that only the owner of the property will be able to get a licence for STR, with most indications being they must be an owner occupant. 

We are both inexperienced in the rehab side and even more scary would need to do it from a distance.

How do you propose that an inexperienced, out of state wanna be investor with a busy career and family that has no experience managing a project is going to do it without getting their clocks cleaned?

I hope you can read the tea leaves better that I did.Mark

Maybe OP just lacks confidence in his docs or needs to review with their attorney to ensure they understand, perhaps an inexperienced escrow or OP doesn't want to be a jerk about it, he's looking for advice on BP about the nuances in this "grey area" and wants to be professional but without being taken advantage of by what sounds like from his description to be buyers acting like clowns. 

Not my cup of tea but it looks like someone is interested. 

Do you all think I would look inexperienced/naive if I did ask them what they wanted from me?