It is most common to simply allow this to happen, maintaining original lease language with annual rent increases, as opposed to resigning new leases every term.

Therefore, education FIRST to get the fundamentals and learn the real estate language.

Is it worth renovating to make the unofficial bedrooms official bedrooms? 

Is there official email I should send to protect myself keeping the SD so that we can officially end the lease early?

Im officially a real estate investor! 

Ask questions like will you pay a cap to your broker in both states, what is each cap, is there an extra brand fee (sorry I don't remember what the official term is for this, but some brokerages charge 6% more) and is this extra fee for each state essentially doubling your expense?

@Michael PlaksThe flush language of Treas Reg §1.61-1, as alluded to above by @Christopher Smith.But...if you want me to go the extra mile:IRC §1241 and the related reg, andGeorge and Myrsini Stotis v.

Also, just to clarify, are you saying to first write my own LOI (making sure to include a time frame of when an official offer will be drafted upon the acceptance of the LOI offer), then once I have come to an agreement with the owner, go to a real estate attorney who will look over my LOI?

I am in charge of putting together a rough outline of what the partnership structure will be before we get a lawyer involved to make it official. 

The trick is that the entrance to this property (if converted) would be from the side street of what the official property address is.