So when you sell, be certain that you outline that you are the owner in your PA and in any advertising including signage.Also be sure to use licensed contractors in the flip and proper permitting.  

I've outlined my crude analysis below based on rough assumptions to give you one perspective.  

Do you believe it will have the consequences outlined by RR if we do?

between the three of you, I'd also have an agreement outlining responsiblities and "shares", and any applicable process for one or two partners buying out the third.

I have outlined a script below to make sure I get all the info I need, offer all possible options, and don't break any rules.Does this sound like a good approach?

First and foremost, I’ve created a comprehensive checklist that outlines every task involved in a thorough cleaning. 

The best path forward could involve any/all of the options you outlined.

You give them 30days to stop doing the stuff outlined or you could take them to court but you need to have super nest record keeping of the eventsBut at this time if they paying rent do you really want to go down that route.

Does anyone have a template or outline of what a proposal for investors should look like?

On top of that, make them sign a pet addendum that outlines these fees as well as your pet policies and procedures.