Diversification is always paramount, and I think you have to constantly evaluate your time allotted to certain things vs relinquishing control on certain investments (whether that's a wealth manager/financial planner, property manager, etc.).Either way, good luck and congrats.

And you get the joys of being able to diversify your allotments, Projected Returns, you even get geographical diversification. 

A property management software such as AppFolio or even AMSI are really good with consolidating all of the information, keeps track of service  repairs, allots for accounting and maintaining resident ledgers, can keep record of correspondences and of course store archived information from previous residents. 

Meaning, if you set up allotments going to a stable fund with the same funds you put the negative cash flow, in ten years it´s nearly guaranteed you would have well above a 150k balance.

My thought process is I rarely use the 5% allotment for repairs or the 5% alloted for vacancy of the GRM I allocate over my entire portfolio. 

I've allotted a portion of my budget to do the renovations for a property to convert a portion of the house like you mentioned to maximize rent.

In each phase of construction a portion of the units will be allotted as investor owned units.

After that, there’s a lot of other requirements to get the str permit as well, not more than 30% of your neighbors can oppose, there has to be enough permits allotted for that area, it has to be in an area that is zoned for it, etc. and like @Jay Hinrichs said, it’ll cost you a premium.

It is to be setup as a structured allotment sale over a 7 yr period to avoid a lump sum capital gain payout.  

I didn’t see a penalty for not refunding it all within the allotted time (Some states award 2-x3 to the tenant for not returning it quickly, never any bonus to owners.).