I much hope we are not going to permit the same folly.

Are these types of trees not permitted in this community (native to TX or not)?

If you don’t develop the entire community but have permitting/approval for significantly more units, your exit strategy will be far better attracting the bigger players to pay a premium for the upside potential.A client of ours recently tore down and rebuilt a small MHC in central FL.

I pay the cost of the permits.To demo the whole house - $3,000 plus I pay for the dumpsters.New Roof - $3,000 Waterproof basement - busted up concrete and installed french drain system  fed into sump pump (kept existing sump pump) and water seal paint the inside (no outside work) $5,000.Frame whole house - $3,000 (basically basement and main level.. upstairs didn't really change)Drywall - delivered, hung, and finished - $32 per sheet he estimates 120 sheets needed ($3,840 total)Insulate all walls and attic - $1500(*) Rough electrical including permits,new panel & wire - $4000  (outlets, switches, cans, fixtures, etc. additional)(*) New duct work - $4,000 ... seems fairly simple with the house demo'd and being such a small house. 

Most cities require an “alarm permit” which I didn’t know was a thing, but it is, and it comes with hefty fines in some areas if you don’t have one so check with the police department if you decide to install one and see what their policy is 3.

Even with electrical / plumbing changes, getting permits is a normal thing and is not related to zoning.Changing municiple address is some thing you will have to check into but not sure why you would do so. 

Doing window replacement, permits approved, and AFTER installation sheetrock and residing, Opie decides that the upstairs bedroom windows arent big enough for egress. 

The second and third floor share utilities, with the second floor covering utilities for the third floor, and the tenants agreeing upon the set temperatures, etc.The appraisal came back and said the appraised amount is contingent upon "proof that the third floor has all proper permits (building, electrical, and plumbing)."

Have the furniture and such appraised and sold, or keep what you like; clean, fix, update, and then sell that bad boy.The other ideas are all well and good, but require probable rezoning, permitting, licensing, ongoing inspections by several government agencies, and a willing operator that OK being tied to the place to begin with.

Fortunately for me the market I invest in provides access to; 1. tax assessment 2. code violations 3. permits pulled on property 4. account number for water utility and owners direct contact information so I don't have this issue.