This could free up more cash flow to reinvest in your deals.But here’s where it gets interesting: making the transition to an S-Corp can require a more organized financial structure, which includes separating your accounts, keeping clean records, and being prepared to pay yourself a reasonable salary as the business owner.

I'm not an agent and don't plan on using one for the transaction I'm thinking of making in the next couple of weeks. 

You could either de-convert the basement before purchase, buy with plans for de-conversion, or leave it as non-living space.

My current plan is make a conservative offer, pending financing so that I can get those 8 and have enough cash flow to pay my HELOC while not compromising the flip.

Windows are part of the floor plans so always make sure you do your proper due diligence.

You just won’t have rent during the rehab period, you don’t need to deduct it from anything - just don’t plan on getting any.

I would pay I/O for 5 yrs, and then ri-fi but you HAVE to hit your pro-forma to execute this plan. 

I’m being a bit uncharitable here, but they backed off of their original plan, stayed silent for two months, and then quietly passed a regulation stating four or more unrelated occupants can’t live together.

Looks to me there isn't a lot of room for creativity in SLC based on my understanding of Zoning and Planning. 

I have a similar situation where a Canadian investor friend and myself (a US citizen) are planning to partner up in Florida to flip properties.