In Berkeley, the code apparently allows conversion back to original configurations. 

I have asked for clarification on the following:-Current occupancy- Unit configuration for each unit (rental amounts listed but configurations are not reported)- Who owns/maintains the laundry machines- What utilities are included in this figure/unit (local advertisement for one of the units states only water and trash are included ~65/month is on par with the market)I know I need more information and I am also aware that these numbers do not include reserves, debt service, lawn care, property management etc. 

The current configuration is two (failing) 7yr old 40 gal (connected in-series) tanks that are constantly 'cooking' on HIGH heat. 

There are a few things you could do, depending on what the configuration actually is.

I own 2 vacation rentals a few blocks away and this was great opportunity to add 4 units in a creative wayMost investors didn't identify zoning allows STR vacation rentals and the property is already nicely configured for residential with 4 x 500sf units, which will become small 1 bedroom Airbnbs How did you find this deal and how did you negotiate it?

You don’t give any details or the address so it is either an unpopular size/configuration or location.

My question is, how do I configure a deal with partners on something like this.

This is unique property and I too am surprised a lender wants to deal with it as it's configured.

I'd also recommend Avery's book. also read it. again, it doesnt show or go thru actually in the platforms, where you create your listing, where to set prices, makes sure have this 1 item configured, make sure you do this thing, etc. the books you guys are mentioning are more on strategy, not actually using the AirBNB and VRBO platforms themselves

Since closing, I have spoken with neighbors and tenants who have lived there for a while, and learned that the plumbing is unique because it saved money and time to configure it the way it is configured.