I could see a requirement, perhaps under the Patriot Act, that requires all landlords to get a SSN/TIN from everyone living in a unit and report that (or lack of) to the federal government.

., Purchase Price: $475,000 ($197.9/sq. ft.).Estimated Market Value: $402,000 ($168/sq. ft.).Financing Terms: 2% interest rate, with a 9-year balloon.Unit B Income: $2,049/month (Section 8 tenant through November 2025).Unit A Income Potential: Similar rent or higher; Section 8 cap for the area is $3,234/month.Monthly Loan Payment (P+I): $1,386.Cash Flow Breakdown (if both units are rented at $2,049/month):Gross Rent: $4,098/month.Vacancy (10%): $410/month.Operating Expenses (37.3%): $1,376/month.Net Cash Flow: $943/month.Key QuestionsWould you be comfortable paying an 18% premium for financing at 2%, especially in a market where current mortgage rates are closer to 7%?

5 units make a huge difference in NJ. 

Another option is house hacking—buying a small multi-unit, living in one, and renting the rest to cut costs.

I might sell some units as well. 

Also will be adding two ADUs in the back to turn the whole place into a 4 unit rental.

You are particularly interested in short-term and long-term rentals, promising ROI, and locations with a mix of affordability and growth opportunities.Being willing to move and live in a part of a 1-4 unit property will help you get better financing, for sure, and require less down.

Do you build any multifamily units?

This month's Units magazine from the National Apartment Association has a good piece on fraud detection.  

Best of luck with your 6-unit deal and future investments!