Regulatory environment here matters, quite a bit. 

As long as each parcel meets minimum zoning requirements (size, set backs, electric/water, etc.) then it's not a terrible way to do it. 

I am a big fan of the Chicago controls auto setback thermostat.

@Pat LioneI'm not familiar with your situation or regulatory rules...

The opportunity cost issues are: having to pay all utilities plus a housekeeper along with some regulatory overhead from the State, along with some "gotchas" like not being able to put locks on bedroom doors or you're technically operating a boarding house which is a whole different can of worms. 

The reason it is not "up to code" has to do with the setback from the property line.

Given the regulatory pressure Airbnb is under it seems like a risky proposition.

I caution you though that there is more than zoning that can affect building plans, like deed restrictions, easements, setbacks, floodplains/ways, and the list goes on.

The FDIC and many state regulatory agencies will require the lender to substantiate a global portfolio freeze based on value.In the past, I've frozen my entire portfolio but I was able to document that, on a global basis, values had decreased in excess of 50% from origination value.

That is a regulatory declaration that you purchased it to hold for productive use.2.