However, The property is zoned as multi Family and it seems to have potential to possibly fit a 6-8 unit building with parking.

Ominous things are happening across the country zoning wise and the competition is exploding. take a lot of the happy thoughts on this form with many grains of salt and spend sometime reading the last few months of posts on the short term rental and you may understand a lot better.

This always raises a red flag.

Here you first need permits & to ensure the zoning is legal for 3 units & that an Ins Carrier will insure the building. 

So just research the area and talk to a local RE agent about flood zones when looking cause that could be a game changer for your numbers. 

I'm not an expert on this, but if the property isn't already zoned for STR then you'll have to go through a re-zoning process which is going to take quite a bit of time.

What questions can we ask them to uncover any red flags?

Side note: if you are considering building a shed or storage units, you should research the property's zoning laws to determine if that is allowed. 

Several you shouldpay attention to are:- Ordinance & Law: Provides additional building coverage to deal with rebuilding costIncreases due to changes in Zoning or Building laws- Personal Injury Liability: Libel, defimation of character, wrongful imprisionment, etc.

I'm looking for leads to developers who would be interested in converting a single family property to multi family once rezoning passes.