As my partner and I did more research we found that this vendor had a different business name the previous month and had a lot of reviews that accused him of taking deposits and not doing the work.  

You are not entitled to business deductions.

There were a few important tactical and operational details in the single family business model that I either did not know or overlooked.

Once you get your systems down, you have a real estate business that you can take anywhere and be still be successful.

There are minimums on the interest rate they can charge you as well so you probably can't structure a 1% rate.

I would give the tenants the option of moving somewhere else or accepting the situation.As you pointed out, your "therapist" is using your residential rental as a business, which is a violation of your lease.

I am a partner in a mobile home business.

What most fail to realize is the STR model is more of a business operation whereas a lender cares about the fundamentals of the real estate.

Or have people found success with other fee structures with their property management for their mid-term rentals? 

The private lender runs "a trade or business", like hard money lenders and professional money lenders do, as opposed to a casual lender such as a friend or a family member.2.