However, you are going to have a hard time getting financing with that structure. 

No General Contractor wants to do a remodel with the residents still living there....they will charge you more (they probably will not show it, but the prices will be higher because of the huge PITA factor and increased liability)I would wait until you have completely moved out and then just give them the house empty and ready to roll.....But you can get a Scope Of Work going and start getting bids...even plans and permits if you're going that far...

Learn how they work now so when the opportunity presents itself, you're ready and know what is available and how to use them4.

It costs them nothing to fix it and you have a year warranty so you’re not getting a mechanical discount. 

You get a call from Sarah at Wells Fargo.

The delivery message indicates that an agent received the package, but I am still worried it might get lost.

Many of the above comments are very spot-on.Not sure if this comment will help, but maybe there's a way to get the best of both worlds if you can build this studio separate from the building and split the lot? 

After 4 pages of people with 5 posts saying it changed their lives I was ready to write it off but @Curt Smith is the real deal in my eyes. 

A lot of newer investors get hung up on the items you mentioned.

so junk fee's are not included in your apr.and you dont advertise your junk fees  you advertise your points.. and when ALL of your competition is at 1 to 3 points with no up front disclosure of junk fee's in their advertisements then thats how you get the phone to ring..