I looked into providing insurance for the property (dwelling & liability) for the owner and they advised me that since I didn't have "insurable interest" in the home I couldn't cover it. 

The Situation:I decided to open a new business which instantly made me not bankable considering I can't use my income towards the loan (I have to wait two years). 

I created instant equity, about $60k.

Accessory Dwelling units are allowed if you intend to live in the home.   

I'd configure it as a 1 bedroom with an open floor plan to allow for a spacious-feeling office area.My wife and I are considering buying into a situation like that in upstate New York or Connecticut- we like the idea of an accessory dwelling unit where we could go to conduct business(she's in interior design, I'm in real estate primarily.)

In the case of the tenant, notice is served at the tenant's last known place of residence, which may be the dwelling unit.D.

*Side note some policies may offer "Repair Cost" settlement which is a nice option that falls in the middle of RCV and ACV and may not require you to insure the dwelling at the full replacement cost estimate.For those outside the major Ohio cities you may have a small stroke hearing someone say to insure it for less than the full RCV.

.* * * If you base your offer on an inaccurate value from an instant house value site, you could lose thousands.

Also have repaired many things in the house to build instant equity.

So on HUDForeclosure.com you can purchase a functioning/decent house that could be instantly rented for $85K in a class B neighborhood with a market value of $172K that rents for $1500.