I'd say based on the information you provided, in addition to Steve clarifying the caveat emptor nature of Colorado,  you would have zero luck in pursuing from my experience.

A New Hampshire Supreme Court ruling last week prevents municipalities from restricting short-term rentals in the state, so this should be a "safe" place to pursue STRs. 

I'm in urgent need of some guidance on the best way to approach this matter before pursuing litigation. 

If he mentions a CT he is probably not blowing smoke and you might want to talk to a lawyer if he is pursueing things.

Figure out how much this could cost you, and if it's a lot, consider talking to a real estate lawyer to see if it’s worth pursuing further.

If it is a property worth pursuing, express your interest to your agent so that the due diligence and negotiation processes can begin.- Submit a strong first offer.

2) If you pursue #1, you'll have analysis paralysis! 

We are pursuing a house hack (fixer upper) and turning the basement into an ADU which we rent on Airbnb.I had a theory that Airbnbs that performed needed to be walking distance to a metro.

We've had several that abate the rent as soon as they find out an eviction is being pursued.

Thus, the next challenge and frontier for many DSCR lenders seeking to serve the growing number of real estate investors pursuing this strategy is to cement a qualification and underwriting methodology to properly qualify MTRs and accurately project their revenues.