The downstairs is a living area, kitchen, and half bath/washer/dryer.

I'm thinking of combining the cash you have + seller financing + bank loan.If you tell me what you have, I can help you figure out the numbers and all that.Best regards,Kevin 

The combination of strategies and systems implemented by a well-trained team under a great leader could lead to a massive competitive advantage just like what you've achieved. 

There have been numerous leaks... hot water heater overflow valve not even connected to exit pipe, Air Conditioner overflow pan has leaked many times, washer/dryer has leaked numerous times, bathtub &/or toilet has obviously leaked in the past, looks like upstairs unit leaked into the bathroom ceiling, & something could have leaked from above & run down the wall the separates the bath & bedroom).

I've been declined at 2 small bank for a combination of being new to bank, inexperienced and credit score.

And you can combine it with sec. 1031 to turn some of the tax-deferred gain on investment property into tax free primary residence gain.  

One was her!

I've found some lenders who work with rental properties based only on the income of the property, not the borrower's debt-to-income ratio, but they basically do blanket loans for multiple properties and their minimum value is higher than the combined value of these properties.So on the one hand, I can't get a regular bank loan because I'm self-employed, and on the other hand, I can't get a blanket loan for investors because the property values are not high enough.

If I had to speculate I would assume it probably has to do with a combination of being more stringent on the rental cap due to FHA guidelines and their requirements, along with wanting to preserve the building's atmosphere of being a condominium not a hotel.

My thoughts would be to make the third floor a master suite for the three bed unit and have combine two tiny bedrooms into one on the second floor, yielding a three bedroom total for that side.I thought about the floor joists as well.