I converted my first primary residence into a rental back in October of 2014 so I have only been renting it out for 6 months.I'm purchasing another in a few weeks and when looking for a 3rd, I've started to run up against DTI issues. 

Thus, builders have been building apartments to convert to Condos once that 6 years is up.

In 1978 city requested that he build a second floor to accommodate additional units (I don't know if this was ever completed)Could convert to mini storage? 

The new appraisal came back at the purchase price and 3 months later I am still trying to get them to understand the issues I had with their appraiser- incorrect data on one of the comps, and using a property that was converted from a book store to an apartment after the sale.  

Property I'm interested in:4 unitGreat locationAll 1bd/1ba with a large dining room that could easily be converted to second bedroom leaving plenty of common space.3 of the 4 units are currently rented at $550.

Let said i want to convert a 4 bedrooms for family into 2 bedrooms unit for expats to create a large space & stand out in the block because the area allow me too and create a certain niche and competitive advantage.

I would like to convert it into 2-3 apartments (like many others on the block) and keep it as a buy and hold.Would it be possible and logical to offer him a lease option for a specified time period, while I renovate and sublet each apartment until I can pay off the balance. 

Also in progress on converting a 1/1 to a 2/2 in a great neighborhood and will then rent that for cash flow. 

@Cameron Skinner Thoughts on your S-Corp/LLC converting passive income to active scenarios:First, he'd still have to demonstrate material participation.

The ceiling looks similar to  this one -  http://smallhomedesignideas.com/images/a791250a0ea...Once the original roof is visible it will look similar to this-https://www.flickr.com/photos/16863012@N06/1427831...Same shape of house, carport in the same spot except that mine is a smaller carport and has been converted to living area.