The concept is solid, and I have at least three good friends in the group who are knocking it out of the park.

@Canesha Edwards How well-versed are you on opportunity zones?

It's not necessarily about overseeing 3rd party managers, it more about self managing, but some of the concepts would apply to your situation.  

The misconception comes from the execution and not the concept.

It's legal, and simple,  and may not even be a new concept to you, but having been an agent for 9 years was never told how or why to do it.   

I toured a foreclosed property in my area that is a 3 bed 2 bath, large, open concept house.

I’m learning here. just trying to think of the best possible way to move forward @Edward B.Thanks for being honest, is there another route you would recommend?

First you file plans for the overall concept for the city to review.

Next you are mixing up a lot of legal concepts that are not usually compatible. 

The value of a 10x10 room in my area is like $600/mo plus utilities and a room 50% bigger 12x12 is worth $650 plus utilities, so lots of little but decent sized private rooms are better than fancy big open concept houses in terms of revenue.