It is just above Paterson Park and i could easily sell it today for more than I paid. 

Numbers do not lie but can be very easily manipulated any way a investor chooses.

My plan is to take a portion of that room and make a bathroom (bathroom would land in the same hallway as bedrooms).The question - Do I turn the bedroom into a 9x11 and make a full bath or still a corner of the room and create a 4x5 tiny half bath (which would salvage some floor space in the bedroom).The other two bedrooms are 12x14.I've done some forum searches but couldn't easily find this scenario.

It's not a good financial plan for them, but as long as we get our rent, their financial situation is their deal.We also inherited a similar tenant, and how you deal with it, IMO depends on if you can rent out his place easily, or if it needs a lot of work.  

You posted it in a form that could be easily copied by borrower scammers, or wholesaler scammers, etc. to use as they wish.

Just a few years ago, I could have easily gotten it for $5,000. 

However, because of the strong demand (and limited supply) in the S8 market, I could easily get the full $1000 a month from a S8 tenant.

I have seen many deals on paper that would easily exceed the 2% rule in rougher neighborhoods in Jax.

The San Francisco Bay Area is easily the most bubble-prone market in the nation right now.

If savvy investors could easily short it would minimize real estate price volatility, as they would begin shorting as markets head into a peak.