The home is one owner since 1955 with minimal renovations so will make for a drastic change.

A zoning change could be to your advantage. 

I would have the system checked , maybe the filters need to be changed . 

We are not currently living in unit 2 and have not changed our status to homesteading.

I think if you break even today you’d still be a net winner in 5-10 years with higher rents, appreciation, loan pay down etc...most people I talk to can’t change their life with $100/mo cash flow or even $250/mo so if it’s $0-$250 it’s virtually the same.)Are you planning on using property manager?

Just have him deed the property to you, no money changes hands, you start making the mortgage payments and get the house listed for sale.

Rent to own was a good strategy till 2014 when Dodd frank changed the game and considered it a predatory lending practice .

My mom and siblings both lived in Nashville/Franklin for a few years and I got a chance to see how much change is going on down there. 

There are a lot of "rules" that sometimes change every year, so your CPA/tax guy needs to be current in his/her knowledge about this area.Lastly, I don't think you'll need a business license, but you should check with your local city and county offices on their rules.

I changed my strategy from traditional buy/hold to Airbnb and now making 3-4X rents.