If the market rents do not cover the mortgage, you may do a no ratio DSCR for a higher rate/reduced LTV  Which most likely the 1007 will be nowhere near the revenue generated by a PadSplit operation.

This ensures you have a clear picture of what repairs are needed and helps avoid surprises during the rehab.

I'd suggest using a minimum of 25% of gross rent to cover expenses on paper until proven otherwise on any given property.Only you can decide how much cash flow is acceptable but I wouldn't consider something that essentially breaks even.

i say that not to discourage you, but so that you have a realistic picture of what to expect.as @Travis Timmons alluded to, you need to be in a strong financial position to even think about starting to invest. 

Also a covered porch on the front.  

This way the lender is covered and only lending on the value that is legally zoned and compliant (in case the city took action against the non-conforming unit).

The zoning office suggests reviewing the zoning ordinance, but the course didn’t cover zoning assumptions in detail.What’s the best way to verify zoning suitability and double-check zoning information?

I can not picture a single scenario where this is a "solution" for anyone other than the middle man. 

Picture the BIGGEST graveyard in the world, stretching as far as the eye can see, horizon too horizon.

. - exterior "usable square footage" (think covered patio, pergolas).- extra storage space so tenants don't feel the need to squeeze their entire lives into one room (extra garage space, attic, detached shed)- room for 2 full refrigerators!