When used as an Operating Company, the traditional LLC can enter into contracts, handle repairs/contractors, enter into property management agreements, collect rents, and advertise.

I wouldn't advertise it as a bedroom and would make it clear that it is not to ever be a bedroom, but am concerned about the presence of an unpermitted room in general, but I may be overreacting. 

For now I am closing my portion of the loop on this subject but recognizing this is a subject that's of interest to many I plan on releasing a number of $30 webinars over the summer where I will get more into the weeds on these topics.

Tell them you don't recognize the person in the unit.

(he said he's ok with this since this would be an unsecured loan) The purpose of the loan would be business expenses, growth through advertising and for new route listings.  

Recognize in-n-out and Starbucks are near best case tenants.  

Go to Etsy and search for "rental property tracker," and you will find hundreds of nice spreadsheets to track 10-20 rentals, usually for under $10.Software has extremely helpful features like online payments, marketing syndication (click a button, and your property is advertised on multiple sites), electronic document review/signing, maintenance tracking, and owner reports.

Start advertising as quickly as possible, place the new renter, apply the deposit, and refund the remainder.

Went from an advertised 7% cap to a genuine 7%.

I am a firm believer that if you find an investment vessel that advertises returns above 12 to 15%, any investor should be excited to get into the deal.