Is it worth it to go through the proper process with the city and run the risk of a huge expense to make this a 3rd unit? 

So, what are they worth?

Quote from @Victor Yang:In addition, is it possible for me and my wife to gift 36k worth of equity per year of the house (under the annual exclusion limit) and therefore have none of the costs go towards the lifetime gift limit?

Even if you have an absolutely solid home and its worth over 600k, in my area the most you can rent it for is $4000 MAX.

It’s great that you’ve already identified zip codes like 73128, 73170, and 73135; they all have unique advantages worth exploring.I agree with the earlier response—73170 and 73135 are solid picks.

Some agents it is not worth their time to do less then x amount.

@Amir PortalStarting the BRRRR strategy in the Dallas-Fort Worth (DFW) area is a smart way to build your real estate portfolio, especially with the area's growth and rental demand.

We bought it for $399k, and it’s now worth about $650k with $250k equity.

The property is only worth what it is worth - what the seller needs to make is irrelevant.

Just trying to see if MTR or STR would be something worth trying in the area.