There are tons of valuable posts, learning materials, and great individuals here on Biggerposckets- so this is already a good start.

Can a long-distance investor be considered materially participating in their STR property?  

Alternatively, anyone know of any genuine private lenders that are open to this?

If there's a material issue with the property, it's not going away if you cancel your agreement, they'll have to deal with it for the next buyer, too. 

Here in Michigan, it’s not as easy, so I’m exploring alternatives.

Estimating material costs is easier but the labor is tough.

Many alternative lenders have internal guidelines that prevent against lending on assets with any commercial components.

There are hardship withdrawal provisions and others that can be exercised if you meet the requirements. 3) If you have access to a workplace plan, like a 401k, with a Roth component, you can consider that as well. 4) If you setup your Roth with a Self-Directed IRA custodian, they can allow you to invest in assets like real estate, private lending, private equity and other alternative assets. 

Are you suggesting this as an alternative to taking a period of time to save up the capital?

Any reputable contractor has material accounts everywhere and doesn't expect to be paid for labor S/he hasn't yet performed.