This kind of maneuver is likely to land you in litigation but as far as I can tell is permitted under the law in Georgia, which is extremely punitive to property owners who don't pay their taxes.  

Quote from @Kaitlin Scutari: The lease only states how the tenant should give notice- which is 30 days- ""To give thirty days written notice by registered mail or hand delivered to management prior to vacating said premises and to permit prospective tenants the opportunity of reasonable inspection"This was the lease the former owner used- so I just adopted it and was going to implement the standard Massachusetts lease with the new signing (gotten here on Bigger Pockets). 

During permitting, all you're out-of-pocket is the drafting and permitting costs.

We have all of our plans and have begun applying for permits (though that is taking much longer than expected due to Ian backup). 

The actual garage enclosure itself is important as it requires a building permit.

Drywall, and electrical work will probably require a permit. 

Before we purchase the property, I'd like to understand: when we pull permits for the rennovation, would we be required to demolish the front section to bring it into conformity on the setback line or does that typically get grandfathered in?

Just want to add that it most likely will take over a year to get permits etc. to rehab and longer still to sell.

If this is a rent by the room scenario, There are a handful of DSCR lenders that are okay with it as long as there is no un permitted rooms used to rent out.

Now, I am not sure if the banks I have dealt with have just made it complicated to explain to new comers or I did not understand (after repeatedly trying to understand their process) it completely, but it seems too complicated.