Are the guests potentially more prone to be noisy or rowdy since they are in 'vacation mode' as opposed to say a longer term tenant who uses the property as their main dwelling.

The basics are if you are renting out a room in your house or an apartment in a Multi-family dwelling that you also reside you MAY be exempt.If she is renting out a SFH that she has renovated, then I would make sure to follow all federal guidelines. 

The replacement property must be owned for at least 24 months immediately after the exchange (the qualifying period) and in each of the two 12-month periods in the qualifying period: (1) the taxpayer must rent the replacement property to another person at a fair rental for 14 days or more; and (2) the taxpayer’s personal use of the replacement property must not exceed the greater of 14 days or 10% of the number of days during the 12-month period that the dwelling unit is rented at fair rental.

Not mentioned I don't think, check with your jurisdiction as to the number of adult, unrelated parties that may reside in a single family dwelling.

Again, the challenge will be making sure that it looks like it's one single-family dwelling with a tricked out basement, etc.Legally speaking, it's alright to then rent out that in-law suite via the same law that protects/regulates airbnb.

As to your plan of selling 5 properties in different states with seller financing, you still have issues with Dodd-Frank, selling to homeowners, exemptions are not deals done per state but by the owner and none of yours are owner occupied dwellings, you're in the business.

If not, then you will want "landlord coverage" or fire and dwelling.  

I'm always looking for multi-family units, or single family homes with the option to add a dwelling, or convert a structure into a second dwelling. 

There may be some additional options property under a Builders Risk form but it depends on what is being done.The situation with having different policies for the Property and Liability is common with flips and also with non-standard dwellings (ie. vacant). 

You need to change your policy to a Rental Dwelling/Landlord policy.