I would think the fact that it has separate electric meters would add some level of legitimacy to the fact that it was converted before zoning, but I don't really have any experience on whether Indy just considers these properties as "grandfathered" or if they try to enact some level of "enforcement."

(It doesn’t matter whether the loss is deductible on your tax return.)You, your spouse, a co-owner of the home, or anyone else for whom the home was his or her residence:Died;Became divorced or legally separated;Gave birth to two or more children from the same pregnancy;Became eligible for unemployment compensation;Became unable, because of a change in employment status, to pay basic living expenses for the household (including expenses for food, clothing, housing, medication, transportation, taxes, court-ordered payments, and expenses reasonably necessary for making an income).An event is determined to be an unforeseeable event in IRS published guidance.Other Facts and CircumstancesEven if your situation doesn’t match any of the standard requirements described above, you still may qualify for an exception.

I think the only likely option is to do the loans separately rather than together with a commercial loan.

The home is on 0.6 acres on a steep hill so it has the potential for building an ADU separate from the house but the site work would be more difficult on the hill.

@Evan PolaskiYes, the old saying of what separates the professionals from the amateurs rings true here.  

I would have to put all 4 units on separate breakers which would be very costly. 

are the utilities separately metered? 

Is RUBS needed or were things built separately metered.  

In order for me to do that they would have to be separate accounts to better track the funds for the individual property.

@Sienna Parker two separate strategies. 2 years ago I moved a portion of my employer sponsored 401k to a self directed IRA and invested the funds in several flips with my business partner @Cliff Terry.