Here's how the conversation would go from a business standpoint.Tenant: I put $3,000 of material and labor into your back yard and expect you to reimburse me for those costs.Landlord: The lease does not allow you to make alterations to the property without first receiving written permission.

In my area the tenant and I can mutually agree to alter the lease in this way. 

Then if feasbile, they would basically design your retail space adhering and ensuring compliance with applicable codes with the filing (as an Alteration Type 1) which will amend the Certificate of Occupancy to add the retail into the lower floor.

How to translate that into the number of units, understand what is exactly going on to calculate income?

Can you imagine the nightmares of needing to resign a new lease every single time your tenant invited their girlfriend to move in without your approval, or they tried to sneak an unauthorized pet past you, or they made an alteration to the house without your written approval etc etc.

The larger tax deferral is able to offset the exchange fees involved, make the dollar amount of immediate tax savings large enough to be worth the effort and risk, and not alter the end goal.

I don't think this translates well to US members because here we don't really do long term leases the way they do in the UK.How long is the lease term?

This would cash me out of the property or leave very little in it.5) Repeat...This is effectively an alteration of the BRRRR strategy that involves newer homes, no repairs (plus repair warranties), and refinancing with the same conventional loan. 

His translation is brilliant."

It only means that the contract needs to be altered to allow the assignment, or a different contract needs to be used.https://www2.floridarealtors.org/news-media/news-articles/2019/06/what-should-realtors-know-about-assignable-contractsWhat Should Realtors Know about Assignable Contracts?