Those structures are grandfathered - the city isn't making you alter such buildings. 

ALTERATION: You may not make alterations or additions, nor install or maintain in the apartment, or any part of the Premises, any fixtures, large appliances, devices, structures, or signs without our written consent.

As soon as you accept money from a tenant it count as rent in the courts eyes no matter the amount you actually receivedSecond is make sure you have something in you lease that says no alteration can be made to the property with out owners consent.Third is include your PM on any calls and emails you have with the tenants.

The existence of an active business could alter the nature of this transaction.

The occupancy status of said property also does not alter the type of loan.

@Ronald Allen Barney That is exactly why you do "alterations and repairs" no need for a GC as many are terrible business people.

Developing a good base of knowledge on BP and meetups which translate to action is probably a better bet than paying some guru thousands of dollars to possibly show you something worth paying for.

If it's possible to alter the grade of the land or improve the drainage, and the house only got an inch or so of water in it, that house may escape flood damage next time. 

@Jerry W. lol @ getting mad because someone else makes a buck :) There seems to be quite a few suggestions on here that property owner try to get in on action but that business model exposes owner to a different set of risk... insurance company will also want to alter policy to reflect that... is there any market data suggesting the vacancy rates with that model is lower than say hotel vacancy rates?

Altering the grade of the land around the house can make a huge difference.