I do have a clause in the lease that says if someone else moves in we can terminate the lease if they don't comply within 30 days.I did not issue a 7 day pay or quit to the boyfriend (maybe dumb on my part).

We've something along the lines of "Tenant shall comply with any and all laws, ordinances, rules and orders of any and all governmental or quasi-governmental authorities affecting the cleanliness, use, occupancy and preservation of the Premises.

He just might comply, or he might jump on your job and get it done.

The income is guaranteed as long as you maintain the building to the standards required by Section 8 & your tenants comply with the lease.Doesn’t it attract longer term tenants?

Advise that she has 5 days (whatever your state provides) to comply with the terms of the lease that states she is the sole occupant. 

We claimed hardship tho...did the tenant claim any reason they could not comply?

To help with getting tenants in and out of your properties I would recommend creating your own tenant screening criteria.When establishing your criteria you will want to make sure it complies with your local and state laws.

Raising capital is a different discussion and depending on how you plan to raise the money will require the proper structure to comply with State and Federal SEC regulations.  

IF it's going to be simple to get the permits for it, it complies with relevant zoning (otherwise the permitting will be much rougher), and if people will pay to lease it and it doesn't hurt the cashflow of your other two units then it's a workable deal. 

Those statements taken together are incoherent.Being transparent is not a substitute for complying with state law.