So far it sounds legit, but I'm sure as in anything there are potential risks involved.

Someone local to you, you can meet and get references and make sure they are legit.

Even less if you are able to self-perform the work and use temp labor (always go through a legit agency, never hire off craigs list as if they get hurt on your property you can kiss it goodbye)I was into construction long before real estate and very glad I went that path as it gives me a huge edge. 

Even with a good, honest, legit Contractor it is still bad business.

And if you buy a legit duplex (not a home with a basement rental space), you can't rent the other side of a duplex as an STR under the rules.-- Also, if you like the short-term rental model, you might consider buying in one of the Denver-area cities that allow for non-owner occupied short-term rentals.

Everything must be legit/recorded/notarized/etc, no "gentlemen's agreements." 

Reading through the contract they seem legit and very thorough for issues that come up with STR.

A legit PreApproval will require a credit pull along with you submitting pay stubs, W-2, tax returns, bank statements, etc.

That means insurance, like casino gambling, is a negative expectation bet. 

Assuming the numbers are all legit.