If they're not metered separately the bank has a hard time counting it as 2 units for the loan and rental income, unless permits were pulled to make it a multi unit with whatever city official.

I would have to go thru the whole permit and zoning process all over again . what type of hvac units for u have ???

I’m taking lots of pictures as I go to document how the repairs are being done, and copies of all permits and inspections.  

I would be very careful about the laws of your state/city if you are renting it out as a air bnb you could get into trouble depending where you live.I did a quick search and I found this https://www.charleston-sc.gov/1520/Short-Term-Rental-Ordinance-Process do you have a short term rental permit?

Of course by a license contractor with the correct permits, etc.My main qquestion is, since there is going to be an additional tenant should I decrease the rent by 5% for the current tenants?

Usually, if there is a public utility line, this would be disclosed to you during the permitting process.

How difficult is it to get permitted for a multi-family when the property is zoned RS40 land use description "single family"?

I’ve been reading a lot of old posts about pulling permits and the general consensus is always pull permits when required by the city/county.

Current site plan attached uses the existing building and permitted construction drawings have raising the roof and a whole new facade with a drive thru. 

Get building/reno permits- they are Cheap and in CA code inspectors will be on site within 24 hours of the request.