Quote from @Maranda Tucker:  We relied too heavily on AppFolio's screening process, which doesn't update with our county's records fast enough. 

Multifamily is considered residential since people reside in the structure. it's part of contractors license law, our testing is on it and violating can and will result in punitive actions.

It's time to start the process as everyone else mentioned above.

There needs to be some structuring, for sure.  

Wondering what the process looks like for getting a conventional loan for an out-of-state deal.

I know there is surety bond process and there a a few companies that appear to offer a service (Like Rhino)Furnished Finder has a new feature called Worry Free Waivers but when I tried  to better understand their process, it was clear they have not done a good job of vetting this out. 

In the latter I've found many wholesalers who get a client to sign a contract with little to no explanation, leaving the client in a bit of misunderstanding about the process. 

That would be new under the fund structure.

None of the walls I'm shifting around are structural so no issue there but from a leasable / liability stand point what are your thoughts?

Meaning you can add another unit to your existing structure and 2 more units on the new subdivided lot.