Perhaps you are looking for semi-active or semi-passive income, which is where I classify SF rentals, and there is nothing wrong with that.  

I will tell you a great way is in your local newspaper classifieds you can find sellers and buyers.

I know with HFA you have to live in the property for a little bit and that's classified as owner occupant then you can rent it out...I didn't know if something like that would apply here?

Since this will classify as a commercial loan what problems will i run into with that and does anyone have any recommendations for banks with commerical loans.  

You need the zoning certificate to see how the city classifies the property. 

Classifying as (D)ADU means the property must be owner occupied, but the owner can either reside in the main unit or the (D)ADU.

I won't classify myself as an investor yet.

Plus during tax season a higher % of the building classifies for write offs. 

I suspect in many areas of the country with homes prices where they are at... most everything would be classified as C class... at least half of most cities. what I am thinking about is areas of Milwuakee and Detroit  were maybe not deemed C class but no way you could rebuild those beautiful early century craftsman in todays dollars for what you can buy them for today and tomorrow and probably forever more.

I would classify the duplex in a B neighborhood.