We created a syndication and raised 1.500,000

Saika  While a permit is a hassle, what happens if there was a fire, it burned down, someone got killed and the fire department was not even aware the unpermitted structure existed.

What are the pitfalls that I may not be aware of?   

Be aware of state usury laws and consider collateralizing the loan for security.

If you think there might be the possibility of development raising the value in the future, you could try renting out the property to others for non-intrusive uses - parking, roadside vendor, etc. 

Looking to hear any ideas, how one would tackle this opportunity or what would you do other than raising rents slowly and sitting on it to refi or wait on appreciation.

Yes I’m looking for small multi family duplex to quad  that is livable for the moment if tenants are in there that I can potentially fix up to raise rents to market and therefore I can refinance pull my money back out to reuse.

Like Lisa said, the only place I'm aware of this being a thing is in Ellicottville, but I am not an expert on that market.

I'm making great profits off them, but I'm having issues with my m-th bookings and I would like to raise my rates.

I added a new software platform, got rid of all abandoned vehicles, raised rents, seal-coated and striped parking lot, took out loads and loads of trash, got the phone number working and started marketing to local community groups.