The property is 3B1B and I plan to add an extra bathroom it 3B2B.

Most people who buy 2+1 and think they can use the third and get busted on that, end up renting the bonus unit to the top or bottom unit as extra space, but that is a loss on what would be unit rent by more than half.

Consider the extra expense a capital contribution to the equity provided these are in good locations. 

A syndicate is already an LLC or a LP so I don’t see any added liability protection by having a second entity layer.

It's easy to obtain, costs very little, and doesn't require extra, on-going effort to maintain.

If they can't/won't pay the increase, reward them with an extra 30 days to move.

Townhomes have extra holding costs in HOA and could limit your renting ability.

On a fixed mortgage, i could pay extra payments (or a one time lump sum payment) and apply it towards principal.

This way the investor has a quality property where all the payment is going to the mortgage so equity builds up fast and they can take the re-advanced funds and WAIT for the right opportunity for extra yield plays. 

It also makes cleaning easier, as you don't get that layer of nastiness where the sink meets the counter.But, if this is a low end, low rent type area, probably best to do it as cheap as possible.