This approach minimizes potential friction while still providing sufficient time for them to make arrangements.Using certified mail for official notices ensures legal compliance and provides a paper trail for documentation purposes.

The property must be a legalized state.

I can see the advantages of being able to get a down payment to reinvest in a small MFR and I will be able to capitalize on my lower interest for some positive cash flow.All of the disadvantages I can think of involve some upfront investment for legal advice and work, time for further education and that's about it.Any feedback will be greatly appreciated.Thanks all!

By the time we paid the legal fees to our lawyer to do the conversion and the reduction in the balance of the loan took a major loss. 

The lot is big enough to where I may be able to make it a legal triplex but I'd want to explore both options.

Ever try reading a legal statute?

I'd wanna talk to others in. the fund and if they are a legit fund there are legal filings they need to have done. 

Thanks Michael, great info that I can pass along (while disclosing that it is not tax or legal advice since I'm just a Realtor® ;)

Make sure the bedroom has legal egress in case of a fire, either a legal sized window to the outside or a door. 

You will have formation costs, earnest deposits, legal bills, due diligence costs, etc that will likely all come out of your pocket initially.