You do not want to get caught up in a situation where lets say you have a small kitchen fire and your insurance finds out there was 7 persons living in a single family residents, there renters policy and hazard policy didn't reflect that number of people or belongings.  

Since then over time the City plan has been updated or changed to reflect how the area has changed and they expanded the commercial zoning over a couple streets. 

Interest is set to reflect risk, it's not pulled out of thin air so much but you certainly negotiate the expected income.

You don't HAVE to know these things...but knowing what the multifamily comps are for your neighborhood reflect in value, how much it would cost to convert the property, what the city/county allows for your zoning, and your loan qualifications would significantly help your chances of success here. 

I'm still trying to nail down an overall strategy that leads down the FI road, addressing key questions of cashflow, equity, scalability while reflecting my current savings and recurring earnings. 

PCP has long been a haven for gang activity from NY/NJ area, and it reflects in the prices.  

Usually property values will reflect that.

A few of the estimates I looked up: (1) 3/2.5 estimated at 78% occupancy for $166 per night, $47.5k AR, listed at $191 a night(2) 4/3.5 estimated at 63% occupancy for $355 per night, $81.2k AR, listed at $298 a night(3) 2/2 estimated at 67% occupancy for $158 per night, $38.4k AR, listed at $225 a nightOur place, correctly adjusted to reflect bathrooms was estimated at 6/4.5 with a 51% occupancy for $615 a night, $114.5k AR. 

This could influence your ability to refinance the property.Appraisal Value: The value of the property might not be fully reflected in the appraisal if there are unpermitted additions.

As part of the process, take time to research comparable homes in the neighborhood and see what amenities are common and contributing to high resale value.Additionally, the changes you make to a property should be about updating the space not about reflecting your personal tastes.