I had to look up what "variance analysis" meant.If I understand the question correctly, you're asking "What went wrong to not hit our 20% target?"

Quote from @Samuel Pavlovcik: @Nicolas Tow Your Architect is correct that it sounds like the only option for you would be to obtain a Zoning Map Amendment to change to RT3.5 or higher.

They will take the permit fee and send an inspector that will provide some assurance that the work was performed correctly.

Correct.

If you are trying to get a cash out refi, I would think the bank would want to see the correct type of insurance for the business you are running.

I think investors need to have the correct expectation going in or they will be disappointed regardless of who is involved.

Quote from @Cody Caswell: Quote from @Bruce Woodruff: You're correct that getting every detail involved right from the start is critical!

If I remember correctly, there is a provision for properties with Fannie and Freddie loans to be moved to single-member LLCs after 12 months of seasoning if the only member of the LLC is the owner/borrower on the loan. 

I wish you would have told us the year, it makes a huge difference.Anyway, everything you mention, plus 1) get a camera run on the sewer line, 2) make sure the Elec panel is newer and sized correctly (a lot of HIs will just say if it's functional or not) 3) Foundation ( is it slab or raised?)

From a tax implication standpoint, it can be tricky but if done correctly, not a problem.