If you will be living in the entire building, it would be considered 1 unit.Here is how your policy needs to be structured during the phases of your house hack;You only live in the property = Homeowner policyYou live in the property & rent out unit #2 = Homeowners policy with landlord endorsement covering the rental unitYou do not live in the property, both units are rented out = Landlord policyGood luck with it!

My question for the forum is: does making the only bathroom in the unit a 3/4 bath cause it to lose a significant amount of value?

Fortunately, that wasn't a rental, just a white elephant I bought for my family and lived to regret for a wide variety of reasons only part of which were the flooring or the black and purple walls, or the 20 AMP breaker for the Kitchen, living room and 2 bathrooms. 

That really depends on the structure you have in place with your father-in-law. 

Thanks @Caleb Heimsoth yeah the only thing that came up for me was a bathroom that cost me 2k but so far everything else has been good.

Strong agree with Kevin, I think in that structure you don't have equitable rights and then no right to market the home so it would be pretty sketchy.

My question is would it add more value for my area as a finished basement like it currently is or would it be better to add a kitchen and full bathroom down there?

You can certainly structure it that way.

Once the tenants start turning over, I plan to update their bathrooms and pull them out of 1958 and into the 21st century which should definitely add some value to the building. 

Many people will recommend trying to piece together information from different places to try and save money.This is definitely a cheaper route and will be slower for most people, but also not the most structured way of learning or building a systems dependent business in my opinion.What I know is that we’ve had a lot of success with our own real estate investments and we’ve helped a lot of other people over the last 10+ years that we’ve been teaching classes.