There is a happy medium.

Running your numbers based off a short term rental or medium term rental rate is going to get you in trouble.

This is a huge challenge even for us, a medium-size Property Manager.  

For example, if you get a good tenant in there with a medium/long term lease - you can take that straight to the bank to readjust your current note or take out some extra monies. 

I live on 5 acres and am considering building a DADU to use as a short or medium term rental.

I'd need to know more information to determine myself if I were assisting you (hypothetically, of course, since we aren't allowed to advertise our services through this medium), but from the surface level it does sound like you do qualify for the 121 exclusion.

"Long-Term AirBnb" sounds like an oxymoron tbh - I think they are probably whats now being called "Medium Term Rentals" which is using platforms such as airbnb for stays greater than 30 days but less than a traditional 12-month lease.I'd check out the Medium Term Rentals forum here on BiggerPockets and the book on MTR published last year in the bookstore for more info!

Looking for smaller deals I buy myself (Less than $1M) and medium sized deals I can Syndicate (Less than $6M).

@Rebecca Akselrod for medium term rentals furnished finder or airbnb with a 30 day stay for listing. 

There could also be other workarounds or maybe a medium term rental would provide the numbers your client needs to make the investment viable.