I'm also concerned about the liability that I might be exposed to here by allowing what appears to be a business to operate out of my rental.

It just might be a different strategy involved.Cash flows through refinance or sale or operating cash flow is the same in my book.  

Landlords can enter a tenant's property for a variety of reasons, including: Making repairs or replacements Responding to a tenant's request Removing unauthorized window coverings Preventing waste of utilities Changing filters, testing, or replacing smoke detector batteries Inspections Helping with an emergency inside the unit Posting a notice of eviction"Research your state laws because some of your comments indicate a lack of understanding of the landlord/tenant laws where you are operating (like threatening the tenants to keep the security deposit if they don't respond to you, I doubt that is actually a valid reason to keep their deposit, or evicting for late payments, or charging the tenants for your warranty repairs because you missed your 11 month inspection window which was your responsibility, and it looks like your lease says you can charge up to 18% interest for unpaid fees, is that actually legal?).

Any good commercial broker is going to trim the expenses down by 10-20% from what they will be for me when I operate the deal. 

Lenders see all, including how little margin some flippers are operating on.  

There is a lot of inventory in Jersey City, so compared to the rest of the state, there are opportunities there for good STR operators.

(His profit is in the entry fee) He owes 3 months missed payments and I offered to catch up the arrears, bring the loan current, and take ownership.I myself own and operate 13 units since 2017, and I’d say I’m a good operator.Anyways, the issue is that now the bank/owner has been notified of non payment, and while the seller is telling me everything’s fine between him and the person on the note and all, I know that the bank has eyes on this account now. 

If anything this is more of a fly-by night operators vs seasoned operators argument.

Turn-key operators, etc. 

A clear operating agreement from the start is key to keeping on the same page.