At one point, this bear got into the dumpster 5 nights in row requiring us to clean the area each morning. 

You are required by law to send  1099 to the government, and to the vendors if you have payments of $600 or more in a calendar year. 

Is it right that short term rentals are considered as licensing the property for use (similar to a hotel) and not a lease for a long term rental and therefore do not require a brokerage license to provide management services that include price adjustments? 

Do not expect to keep them and be prepared to have to evict.If the jurisdiction this property is in requires anything in place in order to evict such as rental licenses, etc., get them in place before discussing an increase with the tenant because it's much easier to get inspections and repairs done when the tenant cooperates.

Can they get pre-approved for a conventional loan and then switch to FHA once the 91-day requirement is met?

@Michael PlaksI’m not sure if you’re just trying to be controversial, but it’s clear everyone agrees this requires careful planning with a qualified professional.

Point being if you are leveraged to the hilt with no cash how are you going to make those required repairs etc?  

Only entertain this if you feel you can perform.A lease option will require a down payment, more than likely, followed by a balloon payment upon a payoff due date.

It's a more involved discussion that requires one on one communication and no, joining a "community" does not prepare you.

Since your lender requires prior experience building and selling/refinancing a single-family residence (SFR) on your own property, you may need to adjust your approach.