I've seen them allOn paper its fantastic, in practice not so much, but at that point it is too late... 

A house is always valued and appraised using residential practices which uses comparable sales.

Here’s a step-by-step guide to help you through it:**Understand Local Regulations:**First, you need to check with your local city or county to see if the zoning laws allow for this conversion.

This has been court tested by over 40 years of case law. 

In a cooling climate your state's laws probably state the calendar date upon which heat needs to be provided (for example beginning October 15th) and the temperatures that the unit is required to maintain (for example 65 degrees). 2.

You are required by law to find a replacement tenant as quickly as possible and then refund any unused rent income.

If you found a replacement tenant that he found suitable and moved them in before you entered in any unpaid portion of your lease, I would expect you to receive a full refund of the security deposit.I would check with the state laws and see how much you can sue him for in small claims court.

Their rationale is based on Illinois law, where security deposits must be held in a separate account and accrue interest if held over 6 months.

I’m worried about liability, safety, and frankly, whether my personal belongings are at risk.I’m in Illinois (but not in Cook County or Chicago, where I know the laws are stricter).

@Chris SeveneyI do want to minimize liability considering I intended to have multiple properties under one LLC capped at 10 just because somewhere along the line I was told this is good practice.