Does that mean that every property and person should use HM exclusively, we'd love it if you did, but it's not practical nor right for every deal.There's no such thing as a blanket one size fits all answer to which way to go.

Contractor is suggesting we convert it to a 2 bd to make the rooms larger, and more importantly, the bathroom nicer and able to fit a full sized tub.

Size is generally 200 units and up.Do you own large class A apartments that are newer and 200 units or more at each complex??

, but I did find two nearby/similar sized homes (within 300 sq ft of the one I'm looking at) selling for low 90s.

Apply for a Conditional Use Permit to increase the allowable size of the secondary residence and sell the entire property with two homes on it.Both options require approximately the same amount of time and money to change entitlement, barring any neighboring resident opposition.I believe the first option would be more lucrative, however, the Zone Change is a 50/50 chance.

3 and 4 unit properties are management intensive and are hard to place with a competent management firm as they typically have a minimum size deal that they will work on.  

It has 2 houses on one lot, both huge in size, 2200 and 3500 sf, on a 50000 sq ft lot.

That's about as low as it'll go for investment, UNLESS you go for a multifamily property and move into part of it.Of course, the size of the loan will put a limit the kinds of properties you can buy - what is your strategy in that regard, and what does the supply and demand look likle in your area?

You can see an idea of what she means here -> http://www.remodelista.com/files/styles/733_0s/pub...Am I crazy or would that loft bedroom take away a decent sized chunk of demographic who would never want to sleep in that little loft ores (or climb the stairs to get to it every night).

Could be some breaker was mis-sized.