I'm sure it won't be cheap, but even if it's $10k, that'll pay for itself in 5 years.I'd also be interested in splitting the water too, if it was really cheap to do so, but I'm assuming that at a savings of only $600 a year, it'll take an unreasonably long time to pay for itself.

I just paid the collection, in retrospect it wasn't worth stiffing someone who ripped me off, but as someone who sees a lot of credit reports, that seems unreasonably harsh. 

I tell them that I have "unreasonable expectations, it needs to cashflow well" so they don't keep sending me crap.

HOA is the obvious hurdle.

Again, there could be a situation where the conversion would work in your favor, but there are some hurdles to address 1st.

Yes, one of the big hurdles we are planning for is preventing down time or nuisances to the first floor businesses caused buy the renovations (installation of new electrical, plumbing, and HVAC system).

I know the whole idea is for it to be turnkey, but since I'm local, I didn't know if this would be an unreasonable request.

My thought is that with any multi-year double-digit year over year increases (with rents up ~50-100% in the Bay Area over 7 years), it's not that unreasonable to give back the last couple years of increases, at the end of a cycle.

Some questions I have about the process.What hurdles do I need to overcome when adding a living structure? 

My toughest hurdle has been finding a good property manager.