IDEALLY, we would like to find a property that has or is capable of being converted into a “mother in law”, “ADU”, “Casita”, or any other separate living quarters in which we could rent out the main portion to a tenant (short term or long term) and then use the separate space as our own for when we come and go with business.

If that's not an option than you'll have to close and serve notice yourself and abide by your local laws.

You should check out Larry Andelsman of Andelsman Law in NYC.

The owner of the property I purchased is litigious in that they have filed a number of frivolous law suits in reference to the property. 

Know and obey the law.

And some of these left HML in a tight spot borrowers could not access their draw money.. this happened just recently to Fund that Flip.. and their borrowers I know i got a call from one of them that was owed 300k in draws that was not coming.I can understand that rates aren't what they are when you close as when you get quoted, but if you offer a "rate lock" and use that term, you need to stick to it even if you aren't required by law to do so.

Main things being population growth and landlording laws.

Hi Ryan, I'm a licensed real estate broker in Illinois and also a property manager, and yes, in the state of Illinois, you need to be a licensed real estate broker (to be compliant) in order to manage property owned by others, because property management is considered a form of a real estate activity under Illinois law. 

In a community property state like California, if your SMLLC is considered jointly owned due to community property laws, transferring a jointly owned property into it might not trigger the due-on-sale clause.

As mentioned, you probably have to skip condos, and you REALLY want to look up the local laws AND the HOA CC&Rs.