After all, if a fellow investor is willing to take unethical actions in a contract or against a buyer or seller, what makes anyone think this person won't also lack ethical principles when dealing with YOU directly? 

Its time to take some action. 

So yeah, it's an action of weeding out the 199 "bad apples" to find the 1, ONE legitimate person/family. 

The purpose of my "read books" comment was to illustrate that I understand the risk associated with this and that I am responsible for my own actions.

Any information would be greatly appreciated as Im not sure exactly what would be the best course of action.

I'm more interested in action.  

My relator said we shouldn't go forward because if the city find out we turned it into a duplex the county can take some type of action on us "not sure what that means" "Also i feel like my relator has a legal obligation to tell me not to go through with this because if he said do it anyway i could possible seek legal action on him (ps I wouldn't)"..

I’m new to all of this but motivated to take action and make calls to whom ever so any help would be much appreciated.

I did mention two other things, but those were specific to the comfortability/uncomfortability of the roommates based upon her actions, which the lease does not mention anything about.Moving forward, I will include something about the roommates opinion in the lease. 

I always seek and provide concrete, actionable steps to be successful in this business.