The last two hours were with the legal team at MR and they confirmed there can be no other up front charges beyond the one month’s rent cap.

Most are fine with that, but a few will have problems with it and claim there are legal issues, etc..

I’m looking to access some of the equity in the home to buy out my ex-partner, and my goal is to either convert the house into a multifamily property or add a dwelling unit (ADU).I’d love to hear any advice from the community on the best way to approach this, particularly in terms of financing options, legal considerations, or any similar projects you've completed.

As for the legalities of setting up an LLC to protect you and your partners, I would consult with an attorney for best judgement. 

Not sure if that is still legal or even translates in today's world of everything online but seemed like a good screening tool to me at the time. 

Just be sure to be prepared to get legal advice if you run into grey areas that you are not well versed in to avoid legal implications.

Isn't it unlikely that a homeowner who cant afford a 2-3k tax bill would even challenge this legally?

If HOA by laws state past due owners are responsible for all late fees and legal expenses for collection hire an attorney to go after the past due. 

Consider balancing liability protection with administrative costs, and consult with a CPA to align your structure with your financial and legal goals.This post does not create a CPA-Client relationship.

I believe the code says "if a veteran holds legal title to a property secured by a VA loan but does not possess equitable title, this situation is considered 'not a disposition."