I wish there was a simple step by step instead of guidelines of best practices, but every deal and investor is different just like the pies.Anyway, I house hacked 2 of my rentals, my first and 3rd. 

This best practice is no different than if you receive a physical check from a tenant.

I'd hate to jump to any conclusions, however my gut tells me there are a slew of laws broken here: I just looked up "real estate fraud crime" and here's the definition: "Real estate fraud is when an individual or agency uses false information or misrepresents the information for any real estate transactions."

Is there a law, state or federal, saying,at so many properties or income level, you must get a real estate license.

She's talking about what normally crosses her desk, and I can only assume that she is correct for your market.But there is no law that says your deal must be what "normally crosses her desk." 

However, this would be the first time being a landlord and, for those who invest in Niles, is there anything I should keep in mind in terms of local laws when renting out my unit?

One thing to consider is your future tenant has to abide with those HOA by-laws.

There is an old saying in law that "A servant cannot serve two masters".

I say a couple because anybody can show up once, but is it a business practice? 

In reality, this is a process that requires (by law) that you enlist the aid of a Qualified Intermediary (there are a couple great ones here on BP).