The owner is selling FSBO and told us an asking price of $500K.

So I as the owner and my team get paid a salary but get no money until the pref is hit. 

I’ll second this one and you may not always know about them ahead of the purchase but my first bed and breakfast we knew we had one ghost and we just couldn’t sell the house so we knew a lady that communicated with spirits (if you don’t believe in this that’s fine) and had her come over and there were 4 ghosts and she was able to get 3 of them to leave except for the original owner of the house who wanted the new owners to take good care of the property.

I can tell you I've had quite a few owners calling me in the last few months looking to transition their STR into LTR for the same reason, and like you, many are stuck. 

They are selling their program to mentor and help you reach that goal in 6 months (Me Calling leads from Listsource.com to find deal, Finding owners (propstream) having discussion, Sending Letters of Intent (after they have ran the deal thru an analyzer to make sure it makes $ sense, Then finding the funding/investors in their network) and then to help you stabilize and refinance and pay off the Investors/Syndication. 

If you look at an owner operator of apartment buildings you will get an idea of the amount of work that needs to go along with investing.

It's the common AOA Rental Lease Agreement form from the previous owner. 

I would start by determining the ratio of owners to doors. 

Co host is a loop hole because the money goes to the owners bank account not yours.

All of that said, I've known a lot of wealthy people in my lifetime and I've known a few bicycle shop owners over the years.