Good luck and there is no harm in protecting yourself!

All these regulations force us to become more restrictive in tenant selection criteria and end up harming the very people they are meant to protect.

Remember, you always get what you pay for in the end.We don’t know anyone in the area, but you might want to read our series about “How to Screen a PMC Better than a Tenant”, since selecting the wrong PMC is usually more harmful than selecting a bad tenant: https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

This would not harm your 1031 Exchange. 

In general there is no harm going to the building department for the city, giving them the address or plat & lot, and basically asking what would be needed to get it approved as a two family.You usually get much more information if you’re able to go and ask in person, and explain that you are considering buying the property but need to know the likelihood of approval.In general it is very easy to go down in number of units, and much more difficult to go up number of legal units, but sometimes you can luck out if you have a big enough lot.As far as separating out the utilities, you’ll need to have an electrician do the work and then have National Grid put in the meters, and National Grid will require proof that the city approved the increase in the number of units.

You should have never made an offer on that property.No harm here, you are still new and learning.

read the HOAs bylaws, ccrs and all that and the only language used is "unreasonable or undue" harm to the neighbors, traffic, etc. do most hoa's immediately lay the smack down on STR's or does it really depend and is case by case?

There is no harm in waiting a couple months and seeing what happens.

We don’t know anyone in the area, but you might want to read our series about “How to Screen a PMC Better than a Tenant”, since selecting the wrong PMC is usually more harmful than selecting a bad tenant: https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processesAdditionally, don't treat property management like a commodity and just focus on the lowest price!

We don’t know anyone in the area, but since selecting the wrong PMC is usually more harmful than selecting a bad tenant, you might want to read our series about “How to Screen a PMC Better than a Tenant”:https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processesWe recommend you get management contracts from several PMCs and compare the services the cover and, more importantly, what some may leave out.