For example, the stairway is not level and you would have to scrap the house and rebuild to live here.

Again, others might feel differently here.3) property level due diligence: (takes seconds to weeks per deal): here is where I drill in with the low-level details.a) pro forma popping: I examine all the assumptions, and see if they are overoptimistic or not.

Non-payment of rent is always the path of least resistance to get someone out in a somewhat timely manner.

And the reason why your "tale of two halves" will play out as you described.Demand:  This has actually been high almost all along, but rent growth hasn't materialized in response due to high levels of new supply. 

But at the local commercial level, you’ll have a more in depth underwriting review process  

And you get feedback at a level high enough to determine how to proceed. 

It’s great to hear you’re ready to take things to the next level in the residential space.

There are no municipal-level rental restrictions. 

If not, then the path of least resistance is to simply adjust your vision so it fits better into the lot, as-is. :) A zoning change can take up to 6 months, approval isn't guaranteed (despite Aldermanic support), and potentially cost a lot of money (architectural site / floor plans & dimensioned elevations, zoning attorney, holding costs, etc.) 

Once you know who in your circle has $ to invest, you then need to understand their risk to reward level so you know what deals fit their bucket.