They may just vacate.

The plan was to house hack the house by setting up the third bedroom as a studio apartment with its own bathroom and walk-in closet.

It has a free plan that I think will meet my needs.  

Or are you planning to put 100% of the risk/cost of vacancies, furnishings and tenant nonpayment on the owner with you having 0% risk?

We have a development coming up for approval with the county adding over 100 units bordering our small town and you can bet everyone that lives in our town is upset about it. in the end though, the planning commissions in our area tend to follow the letter of the law so to speak, so if there is nothing in ordinance barring it, they will approve, generally.

Their entire business plan is wait a few days to come out, charge  deductible, go back to the office to order a part or two that will come in a day or two.

That means paying all cash isn’t an option unless you plan to bring another $600k to the table. . 

Plenty of people do have 10-20 unit and work thru it, you just need to think it thru and have a plan if you don't want to do all the work. 

The game plan would be to keep this structure for 1-2 years with future full sale.

I already make a living out of real estate and I'm not planning on ever leaving this space, I'm here to stay.