For your case, LLC does not alter your tax obligations.

If you choose to alter your lease, GET IT IN WRITING.

At that point, the responses are going to be primarily based on your offered price vs. disclosed amenities, so you can get a good idea by the volume alone.If the response is limited, drop the price by $25 after a week (preferably having the weekend in the middle of this several day "test"), change the default image and alter the ad title slightly (or, alternatively, post a new ad) and give it another week. 

So it is possible and likely that 90% of 2-4 units you look at are in RS zones and considered "legal non-conforming"You are right, do alter it or increase density you need the alderman to change it to RT which will allow for 2-4 units and expansion.If you do not plan on altering the footprint you should not be concerned if it is RS

But typically lenders making a loan on a piece of property will not want to release or subrogate pieces without significant alterations to the loan. 

My agent went to the city and they confirmed that the alley is not abandoned and is active as far as they know and there is nothing registered with them with regards to the encroachment.1) Are there any ways to resolve the neighbor encroachment issues without altering the structure (i.e. buy that piece from the neighbor, set up a binding agreement)?

Regardless of the market, there will always be opportunities - they might be squeezed or you might have to alter your strategy - but there will always be people making money leveraging numerous different strategies in real estate.  

The advice I've seen when receiving a life-altering sum of money (including the sale of a property you might have owned for a long time) is to put the cash in liquid savings and then become financially literate.

Can the window be altered? 

Yes, you can alter openings in masonry buildings.