As far as the buildings split into 10 units, are likely larger apartment buildings, and thus designed and built to code for that amount of people. Those types of arrangements wouldn't be in previously SFR that were simply rezoned and divided into multiple smaller units.
As far as splitting a 2BR into a 3BR, I am not positive on whether there is a cap on residents/unit. However I believe I remember hearing something a long the lines of no more than 3 unrelated persons in one unit (enforced to varying degrees). I think that is why you will see a lot of 4BR split into two 2BR apts. Again, don't quote me on that.
The house that I lived in when I was there was a 4BR converted to two 2BRs - and we loved it. However i do remember being unsure about it before hand. Like i said, there are a lot of houses that are set up this way. So long story short, I think there is going to be demand for both. If it were me, as an investor I think you'd find more demand for the two 2BR house as you can still offer it to a group of 4.
I hope I answered your question. Feel free to connect and PM me with any questions you have!
