Even more common with many cities wanting to spruce up main street.Can get complicated. 

I'm pretty sure they'd want to know, and they're probably not going to be happy about it.But even without any legal obligation, I'd have to say it's at least common courtesy.

On this project, we were able to utilize dead space to add some much-needed square footage.

The renters  really don't want to pay two deposits for utilities.

Is it common for mortgages to have restrictions on another use on the land?

There would be a common kitchen. social area, and bathing area (a few baths/showers) but each unit would have living space, bedroom, 0.5 bath, and a small kitchenette.  

@Brian Orr - Delaware is (one of) the most common state for corporations to be set up in.

Qualification for a Portfolio loan would be based on how cash-flowing the property is, so make sure to have a solid idea of gross rents received, along with the expenses for the property (including taxes and insurance, maintenance, landscaping, any landlord-paid utilities, etc.). 

Honestly, it's been a great property to own so far (I know the time is limited)  and the current tenants, on top of paying their own utilities, handle a lot of their own maintenance, too.As an investor I'm in full acquisition mode and looking to acquire additional properties, deal permitting, and scale up swiftly. 

how to best utilize these two strategies.