I think different approaches are appropriate for different landlords especially based on the size of their portfolio.

These would be bare rental units where tenant builds to suit or we could with appropriate rent charge.

Ensure you understand local regulations regarding permits; it’s usually a good idea for your associates to form an LLC for liability protection, but individuals can do renovations as long as they pull the necessary permits.

Likely they will only allow you to live in the property once you refinance out of the debt due to rules and regulations, but you can always ask! 

Finding a property with the appropriate layout is challenging and expensive.

There's a good chance the issue(s) you face has already been discussed and answered.Ask questions in the appropriate forum.

Is there a way look to appropriately price it?

Short-term maybe short it, for the reasons you mentioned OP but this investment is a physical long-term one so you analyze it appropriately. 

Buying in those areas makes more sense for STRs as the municipalities rely on the revenue.Less chance of a lot of regulation.

There's a good chance the issue(s) you face has already been discussed and answered.Ask questions in the appropriate forum.