While I'm not a lawyer, I think many people assume their suggested strategy would be considered a legal "loophole" and a legitimate thing to do.

How do I check is this process is legitimate?

Looking to use the gains on a legitimate rental property.

The reason you do this: the bank will research your company online, looking for 3rd party verification that your business is legitimate.  

My dad started in this bizz in CA in 1962,,, as a family RE bizz we bought thousands of these lots over the years at tax sales and other venues.. then sold them for 50 down 50 a month.. 8 to 18% interest.Same scenario you see with Texas 20 acre parcels for 2k down 40k and in Montana you could buy 20S the same way before the movie stars found Montana...My pop bought thousands of these over the years. it was not uncommon to buy lots for less than 50 bucks at the tax sales. the 50 down payment we had all our money back.. then we would sell the paper to note buyers in Beverly hills.. for 50% discounts..

Many may be legitimate, but I have heard about mistaken identity leading to being off Airbnb for weeks/months. 

They categorize borrowers into 2-groups, Legitimate borrowers & Drug dealers.

I would hope that they have an NMLS ID (otherwise they aren't a legitimate lender). 

My 7yr old son does Futsal (indoor soccer) and his coach (who is a former professional futsal player) is looking for his own venue.

I say BS these kids have it tough way harder to start a family now, establish yourself financially, or feel like your desires are legitimate.