Since I'm not an attorney and can't give legal advice, I did a little more digging and found the passage below.

I know in California it is legal and the state acknowledges it however it does restrict the finder to basically introducing the parties and they can not participate in negotiations, etc.

Without proper permits, there’s a chance the city may request you to revert any non-compliant additions (like the extra bathroom) to align with code standards.When it comes to refinancing, banks tend to look closely at the property’s legal compliance.

It's also good for insurance and legal reasons, because you will need to indicate every adult and all persons, as well as details (like children, pets, etc.), on the lease.  

Out of the 20 letters I've sent, I've had 1 guy get back to me and we were in discussions but weren't able to find a price that worked for the both of us.The issue is that I only have a few houses on my mailing list so far (just places I've walked or driven by that caught my attention), and blindly searching every street and address # to see which houses are actually legal multifamily will take forever and doesn't seem efficient.I know the data is publicly available, I just don't know how to aggregate it in a way that would be efficient and useful for blasting out marketing mailers.Are there any websites that can pull massive lists of all multifamily houses in my area?

For both short- and mid-term investors, the market's diversity and relatively lower entry costs make it an attractive option.FYI - Philadelphia has a tenant-friendly legal environment, which can present certain challenges for landlords

4) Legal Options: who told you that you can't sue the LLC owner?

I would suggest to check with your local laws first.Most likely you will need permit ( I guess you can get away without, obviously not suggesting that :D)) but possible) , also check your zoning.If not possible to create separate unit legally, I suggest not putting an oven in the basement, and rent it without, or live in it yourself

If a rental/lease contract is a legally binding document...enforced by collecting rent...or enforced by an eviction process if rent is not paid....then can there not be a document (legally binding) for a tenant to sign that would relinquish their rights as a squatter or due process of eviction...

I dont want to deal with legal issues down the road.