VRBO and Airbnb police the permits and validate them on their side, which the platforms have refused to do.  

I would be doing this to gain the anonymity of the Wyoming LLC, limiting my liability regarding the property to the LLC and also gaining the creditor protections of Wyoming law, since it only provides for a charging order that does not permit a creditor to force sale, direct distributions or acquire an LLC interest, even for a single member WY LLC.

Really you'd need a plans, approve those plans for a permit and to get the work done of course.

With that in hand, we close on the house, immediately re-list (avg DOM 30 in the neighborhood), sell that to pay off the loan and sell the shovel-ready lot in 2-3 months when the building permit comes in.

Get permits and do things right.

I'd do it as an STR, that way when permits/regulations come in you can be grandfathered in.

There are many more of this type of property in Durham as older homes with basements are still price accessible.To make it a "legal" or permitted duplex, the process is definitely cost and permit intensive, and in most cases may require you to use a GC or similarly licensed tradesman for parts of the project.

As of 2022, zoning no longer permits new Airbnb’s in most zones  - Fees upon fees upon fees: The STR hotel tax is no joke.

For me to go through the due diligence myself and then if I did buy the property going through the zoning and permitting process probably takes more time than I would want to take and would rather deploy my capital elsewhere.

Did you get permits for everything and did the building inspector sign off on everything?