I have done thousands of rentals, nobody cares about AC, its only used on and off for two months a year, and they always put in a window unit.

Care to share what carriers and how much extra?

From their credit report, it appears they are making regular payments and haven't been late with any payments on anything in several years, so perhaps they just put their wedding on the cards or something and planned to pay it off, but I don't know.

The proposal includes plans for for more than 1,000 residential units at the north side of the project consisting of 122 single-family homes of various building types, 786 multifamily units and 153 carriage house apartments.

@Kevin KimAs mentioned - I give zero effs to how others live their life and care about how they are as a tenant.

At the end of the day, as long as you have the zoning you just need to go talk to your city planning/building department and tell them what you want to do.

2) If secondary, do you have a contingency plan to fund this asset's negative carry?

If you're living there and you plan on living there for a little bit but I don't see what the harm is in it especially if you want it. 

A 1031 exchange would seem to make a lot of sense, but you need to have a firm plan in place to execute on this when you sell. 

Managing the $40,000 renovation budget required careful oversight to ensure timely completion.