I understand there are deduction limits, does this apply to this "STR loophole" as well?

I hope you can understand that.

Find 3 solid comps that have sold as close to the house as possible within the last 3-6 months.Set a realistic rehab budget (ask other investors how much does it cost them to renovate a house based on price per sq ft).Plug in the ARV and rehab budget and DO NOT offer more than this number. 

Aside from being totally creepy, (and to be fair, I need to understand this is potentially a mental disorder and I don’t want to shame or discriminate against that) there have been no actual violations. 

Some are only there to party and don't understand the responsibility they're taking on when signing these leases.

With the right approach and a solid understanding of the market, you can find great opportunities for success in the Midwest and beyond.

My wife and I currently invest here and in Kcmo but want to get to know this area and establish solid boots on the ground.

While approval might pose a challenge due to your lack of flipping experience, a solid renovation plan and clear exit strategy can bolster your chances, especially with strong credit.

I don't really know terms or have any type of real understanding when it comes to real estate investing. 

Perhaps you can find one willing to take on the project, someone who really understands your specific concerns.