I'm surprised someone verbally told you you can convert back to a duplex and didn't tell you that you must get permits.from what you are describing it seems the town gave you a hard time because you didn't get permits, I don't know that you have any legal standing to go after the town,  again, I am not an attorney 

I'd level up with a BRRRR, live-in flip, or house-hack before jumping into a challenging renovation.

Also, I am assuming since you house hacked that you only did 5% down, which then increases your mortgage payments compared to 25% down buyers.

What are your short term goals? 

If you’re not able to, then it may be better to sell the condo, take the profit (if you have some equity in the condo) and put it into a multi-unit to househack again.

This will clarify and reinforce what you are reading.

-follow landlord mentor advice10) Knowing what to do if tenant is late on rent or doesn't pay.

@Jordyn OhsThis is a loaded question as it really depends.

I have two daughters, one graduated and one is a Junior. 

If I am house hacking then what should be the insurance.