First, utilize all the free resources on here to gain valuable knowledge from experienced real estate investors.

Sounds like your AC unit is doing its job and an upgraded one probably wouldn't change things other than reducing the utility bills.

Air conditioning shall utilize mini-split based   systems with at least 18,000 BTU for 700sq. ft. apartment.   

I am a wholesaler so I am familiar with the industry, but am nervous to begin this journey by myself, with no construction background.

In my experience, the policies, procedures, and processes of how sec8 is utilized and administered is managed by the specific municipality, and the case workers assigned to a specific case. 

At most there would be some additional utilities and cleaning expenses, but that *should* be easily covered by the airbnb price based on my research of homes in my neighborhood on airbnb.

land in the path of progress creates some of the biggest profits in the industry.. as long as you can still buy at farmer prices.. and not speculator prices.

The issue is although it is a two bedroom, the 2nd bedroom is actually a former tuckunder garage, it has a door leading to the outside, no bathroom in the immediate vicinity(the bathroom is located next to the master bedroom upstairs), and is the only access to the utility room. 

Take a loan out personally and then utilize the General Warranty Deed to transfer ownership into an LLC?

Obviously, the owner of the property still needs to pay property taxes, insurance, utilities, etc.