I agree with @Erin Spradlin - I think if you can confirm/convince potential tenants that there is plenty of on street parking it is not an issue, but if it is in a busy neighborhood where finding parking could be difficult I think adding the parking area would help a lot.

I have to adhere to the Bank Secrecy Act and the Anti Money Laundering provisions of the Patriot Act as a bank which requires I document and report transaction activity to try to ferret out money laundering, straw purchases, structuring and so on.

You don’t want to spend all the money to convert a garage just to have it be illegal.Structural integrity: One of the most important considerations is the structural integrity of the garage.

A REIT structure?

As you said it will free up some of your time and will help accelerate your business.

contractors are busy and like to stay within a certain range so recommendations will be based on where you are.

As I need to register this business with the state and county, should I need to register LLC as "531110 - Lessors of residential buildings and dwellings" (NIACS code) or something else?

In my almost 30 years in tax business, I have never had a problem that she is concerned about. 

Try starting by narrowing your criteria; asset class, number of units, market, property class, profit share structure, etc.

I'd love to explore how I can be a valuable asset to your business strategy.