From my current understanding, I was wondering if there are more tax breaks from a business perspective versus individual.

If you're house-hacking and want to use the FHA loan for another property later on, you will have to refinance the first property (most likely into a conventional loan).To address the OP's original question, the benefits with going with a 20% conventional loan versus a 3.5% FHA loan would be (1) not having to pay PMI (2) having an advantage when making offers on deals since sellers typically prefer conventional loan offers as opposes to FHA.  

I guess that was my main question: should I be concerned for the well-being of the property and any responsibility coming back on me for aiding in any illegal business by providing the space versus being happy that they pay and don't bother me too much.

However, I would wager most do have errors and omissions clauses that would erroneous or false info.  

Also less paperwork to submit on a conventional loan with only one person versus two.

Here's a good article on the matter:http://www.perennialfunding.com/buying-a-home-versus-renting/

Maybe you offer to take them to dinner or lunch where you can talk with them one on one versus a group setting.

(Versus a company only pulling credit, or only pulling criminal).This was one of the reasons why we decided to partner with them, as accurate records was very important to the landlords that use our service.

I know it is important to find someone that is able to distinguish between a buyer that is looking for their forever home and thus usually purchasing based on emotion, versus working with a buyer who is purchasing based on the numbers. 

That is my formula, so do whatever you are comfortable with.Couple items of feedback on your proforma:I don't know any property managers in Murfreesboro doing 4%.  10-12% is the normI'd assume a 10-15% vacancy for rent by the room, versus 5%5% repairs for a 100 year old home?