It is easy to convert a two family house into one but not the other way around. 

You might think about eventually getting all the M copper out of your house.

P.S. you can also look at converting existing buildings (think of closed shopping centers, grocery stores, etc.) as that will save both time and money (if zoning will allow it).

And then move in after - converting the main portion from investment to primary residence and  keeping the MIL part as rental. 

Both properties were once (most likely) SFH that we’re converted.

If I were to expand upon the main house and make it 1400 sq ft, which is definitely doable, would I then be able to turn around and get that section closed off and convert it into a 500 sq ft or less JADU?

Sometimes a tenant will want 3 years fixed but not as desirable to the landlord unless the landlord knows they are tearing the building down or eventually replacing a mom and pop tenant with a national one.You might want to take your existing lease and any amendments and have them reviewed by a local to the property  commercial real estate attorney familiar with that asset type (industrial, retail, etc.) and give an opinion.

The lender says he can’t legally lend on a single family with two kitchens and the owner doesn’t want to convert. 

There they will tell you the requires to convert to a multi.

It doesn’t happen over night but it will eventually happens if you stick to it.