What is the property currently, and what uses are permitted.  

Was the conversion permitted?

(example leases are signed at 600 a month but many tenants are moving as a foreclosure down the street that was just remodeled and bought at a low cost is renting for 540 a month with everything newer).Do not pay based on potential.Let the seller do the work if they want the potential price.They want to sell a pile of crap but get diamonds for the property (not going to happen).Just be careful especially with additions not being permitted.

If anyone's doing permit work, MAKE SURE you're there when the city inspectors are there.

Notice, demolition, conversion or repairs50. (1) A landlord may give notice of termination of a tenancy if the landlord requires possession of the rental unit in order to, (a) demolish it;(b) convert it to use for a purpose other than residential premises; or(c) do repairs or renovations to it that are so extensive that they require a building permit and vacant possession of the rental unit.2006, c. 17, s. 50 (1).Same(2) The date for termination specified in the notice shall be at least 120 days after the notice is given and shall be the day a period of the tenancy ends or, where the tenancy is for a fixed term, the end of the term. 2006, c. 17, s. 50 (2).Same(3) A notice under clause (1) (c) shall inform the tenant that if he or she wishes to exercise the right of first refusal under section 53 to occupy the premises after the repairs or renovations, he or she must give the landlord notice of that fact in accordance with subsection 53 (2) before vacating the rental unit. 2006, c. 17, s. 50 (3).According to the above, if you can make a case that the planned renovations are extensive enough (i.e. main water and sewer to the building, replacement of HVAC, rewiring, etc) some, or all, units cannot be occupied during the renovations, you should be able to request the building be delivered to you vacant and let the current owner go through the exercise of terminating the current leases.Note the two additions from 2006:1) You need to give 120 days notice ... another reason to make the current owner handle this.  

You should not NEED to bring something to current code unless you are doing a full renovation where permits are needed.

However, to answer your question:  An FHA loan is for owner occupied only, to the best of my knowledge, although I don't work in residential lending, so someone can jump in and correct me.Secondly, conventional residential loans cannot usually be made to LLCs - guidelines permit lending to people only. 

I am trying to think creatively here on how we can generate some income from this to office some of our carrying costs until we find the right buyer...hence the billboard idea.Here is a little about he location:- Back of property has clear visibility from major state route with INDOT listed traffic counts of 12 to 20k cars / day- Property is located on a slight curve, so cars traveling north will get prime exposure (though this may prevent having usable space for southbound traffic)- No billboards in the immediate area with tons of major retails present (i.e. tractor supply, Holiday Inn, Menards, etc.)So in addition to checking the City / State to see if I could obtain a permit, what other advice / insights do you have?

I know I am limited to what I can do because there is the threat that he could choose to report us to the township, as I am doing this without proper permit as this is a SF residential area.Any suggestions?

That means I’d have to deal with Code Enforcement getting permits and inspections, contractors, yard work, utility costs, etc., etc., etc… and it would take up way too much of my time.