Contract marked owner occupied, there is NO tenant in subject or proof tenant moves out, no rent back from seller... you cannot use rents to qualify, do not rent the property, there are ways this is checked and considered dishonorable.Your wife and children can move in and you can come and go as your service requires. 

Ask about the maintenance history.Units: Visit as many individual units as possible to assess their condition and note any necessary repairs or updates.Structural Issues: Be vigilant about signs of water damage, mold, or pests, which could indicate larger problems.Safety Compliance: Verify that the property meets all local safety and building codes, including fire alarms, extinguishers, and emergency exits.Financial and Operational AspectsRent Roll: Request a detailed rent roll to understand current rents, lease terms, and tenant occupancy.Expenses: Get a breakdown of all operating expenses, including utilities, maintenance, insurance, property management fees, and taxes.Income Verification: Ask for historical income statements (preferably 12 months or more) to verify the revenue.Vacancy Rates: Inquire about the historical and current vacancy rates and how they compare to the market average.Tenant Profile: Understand the tenant mix, including residential versus commercial tenants, lease lengths, and tenant turnover rates.Property Management: Find out if the property is currently managed by a professional management company and if you will retain or replace them.Legal and ComplianceZoning Laws: Ensure the property complies with current zoning laws and inquire about any zoning changes that may affect the property.Rent Control: Determine if the property is subject to rent control or other regulations that could impact income.Permits and Licenses: Check that all necessary permits and licenses are up to date.Value-Add PotentialRenovation Opportunities: Identify areas where you could add value through renovations or upgrades.Rent Increases: Assess the potential for increasing rents based on market rates and property improvements.Additional Income: Explore opportunities for additional income streams, such as laundry facilities, parking fees, or storage rentals.Environmental ConsiderationsEnvironmental Hazards: Check for any environmental issues like asbestos, lead paint, or underground storage tanks.Flood Zones: Verify if the property is in a flood zone and the implications for insurance and risk.Questions to Ask the SellerReason for Selling: Understand the seller’s motivation to gauge the urgency and possible negotiation points.Recent Repairs and Improvements: Ask about any recent capital expenditures and future planned repairs.Tenant Relations: Inquire about the relationship with tenants and any ongoing disputes or issues.Due DiligenceProfessional Inspection: Hire a professional inspector to conduct a thorough examination of the property.Appraisal: Obtain an independent appraisal to verify the property’s market value.Legal Review: Have a real estate attorney review all contracts, leases, and legal documents related to the property.By covering these aspects, you’ll be in a stronger position to make an informed decision about your potential investment.

If I add an ADU my SFH becomes a 2 unit,  subject to rent control as a LTR but may not as MTR, need to investigate this.

The easiest way to avoid the licensing issues is to simply lend money, or buy paper on investment properties. 90% of the states do not require a license to originate, lend, or buy and sell paper if the subject property is Non Owner Occupied, ie: Business Purpose Real Estate, ie Investment Property. 

Tenant shall be subject to a fine of $ _____________________ for any violation of thisparagraph, and Tenant agrees to pay any such fine upon receipt of Landlord’s demand therefor.

About 2 months ago another post on this base subject came up.  

I recommend you print, study, and highlight the HUD guide: https://www.hud.gov/sites/dfiles/PA/documents/HUDAsstAnimalN...You should also check with a local HUD office to see if they have any additional guidance they can provide you.Keep in mind, not everyone is subject to Fair Housing requirements and you may be exempt from allowing the ESA! 

It is much more hands on and dependent upon some sort of subject matter expertise.

Going the DSCR route will also not work since he will be subject to a PPP at the time of refinancing into a primary loan.Putting a tenant there for a year and then anticipating to move in after a year may not also work out depending on the states Laws regarding this. 

Revisiting the subject of financing for vacation home/vacation rentals/STR's.  10% down is still an option without having to pay points.