From a vanity perspective, I don't want to be the villain in someone else's crazy tenant story.

So heres my situation.I don't have a mortgage or rent to pay and I have found a property thats in a good area and is a pretty good house. 3 bedroom really 4 but wold make the 4th a bathroom I think its down stairs and theres no bathroom down stairs.

I've only stayed in one bed and breakfast that had shared bathrooms in the hallway, and could have easily been turned back into a regular house.Maybe the future buyers could apply for a renovation loan, to undo any commercial aspects of the home, such as a reception area and truly turn it back into a single family.

Renters with children will need a bathtub so, as you noted, the lack of a tub in the house would be a problem, minimizing your potential renters, if this is the only bathroom.Placing the tub along the far wall and rerouting the closet to have it opening into the outer hallway instead of the bathroom, is a great option if you can find a tub that will work. 

Medium - New kitchen, bathrooms, finishes throughout?

I converted the 400 sqft two car garage into a studio apartment with a kitchenette and a bathroom.

Moderate rehab on the whole house, Roof, kitchen, bathroom, floors, ceiling, walls, electrical, and plumbing.

Teaming up with a close friend, we own a contractor business specializing in kitchen and bathroom remodels.

If so, bedroom and bathroom count is something to consider. 

Half bathroom on the first floor is generously proportion What made you interested in investing in this type of deal?