Bedrooms are cheap.We will likely see zoning law changes in 2025 for the city of Milwaukee that will lift restrictions on ADU's (google GrowingMKE). 

Airbnb is also exceedingly easy to get an idea on what 3BR comps in the area are getting for their weekday/weekend ADR, cleaning fees, as well as seeing if there are common check-in/check-out times, minimum stay restrictions, and how booked up their calendars are, especially right now heading into the back half of the busy summer season.As far as the what kind of legal structures to use for this property, there's so much noise on social media about stuff that just doesn't matter or apply to most people, so I wouldn't worry about overcomplicating your purchase with trusts and holding companies at the beginning. 

Request minutes for the latest HOA meetings, statements, CC&R (Covenants, conditions, and restrictions). 

Hey @Jessie Redd, so there are restrictions in Raleigh.

Those connections will help you work around some of the local restrictions. 

Our government has laws restricting lenders from closing loans that are small loan and high cost so many will not touch these even if investor.

The way the condo is set up, I would need to allocate the one window in the living room to the new bedroom, meaning the living room will no longer have a window.I know bedrooms require certain legal restrictions to be met (2 egress, certain size, etc).

Moreover, our loan covenants also have restrictions.

The advantages to those are that there are less restrictions, less competition and lower purchase price. 

Reno is also geographically restricted from over building forcing appreciation.