The loan is with you, not with your tenant, so none of that means anything to them - in fact because you live in one unit and it's under 4, if you were self-managing you don't even have to abide by fair housing laws (at least on the federal level). 

Depends on what your goals are. 1-4 units are still residential, so it doesn't really matter how you start.

I just turned over a unit in middle of August.

Renovations are almost complete and will be looking to rent out a unit.

The first unit does have a booking through VRBO.

For path #2, you mean purchase & renovate a 3-5 unit building right?

Converting an unfinished basement into a third unit can definitely add value, especially here in Chicago.

The unit is within blocks of Harvard University and a billion other universities are within a few miles.

Unfortunately, the previous owners used the same lease for this garage space as they used for the residential units. 

Investment Info:Small multi-family (2-4 units) buy & hold investment.