I belive there is a good solid structure to work with, I just want to be very cautious.

Personally, unless there were sleeping bags all over the place and little children crayon marks all over the walls, I'd turn a blind eye, with cautious awareness. 

I came up with play it very cautiously and be ready to evict.

Forgot to add, Donny Widjaja advise, offering the tenant an incentive to move is a good recommendation however you need to be cautious. 

Whenever I hear of someone wanting to pay so many months in advance with a wad of cash I think of the movie "Pacific Heights".... not to say there are any sociopaths involved here, but you need to be cautious.

Be terribly cautious about covering hotel expenses.

I'm wondering if there could be a buried hook in here somewhere, just because I am naturally cautious.

I'm be even more cautious but will try to see if I can get some more certain answers as to the legality of the apartment.  

Maybe they're just being super cautious.   

Thanks for the insight @Russell Brazil I won't totally eliminate condos from my radar but I will be cautious with them.