If their is a public easement and there are temporary structures within this easement - the city can come in and remove them.

I wouldn't worry too much about it, if you have a competent CPA or bookkeeper they should be able to review your books and within minutes have a strong grasp on who gets a 1099 (spoiler alert, not every contractor gets one, I'll be annoyed if I get one since I'm structured as an S corporation) and the amounts to report.1099 filings are usually a loss leader for us, so if you're working with a professional make sure you take advantage of them filing everything for you.

How about a lease w/option to purchase structure or a straight owner financed sell to you?  

How should I proceed with structuring this plan?

A master lease to the organization structured with an annual escalation clause and a term limit - like up to 5 years - was a recommended way to get a contract. 

Another option is using different creative financing strategies - it's all about how you'll structure your deals. 

If there are no boarding house limitation to the number of unrelated persons, does this structuring matter?  

I am a builder in NWA.I have given some investors opportunities to partner in builds with me.The deal structure is beneficial for investors because they get a newly built rental property for below retail price.Feel free to connect with me if it is something that would interest you.

Hey Quentin, Here are my bits of advice:Prioritize Value-Add Opportunities: Focus on properties that require cosmetic updates rather than extensive structural repairs.

The appraiser will provide a rent survey and a rental amount that will be used to structure the loan- more on that below.