How are people buying multiple non owner occupied properties on fixed rate traditional 30y mortgages? 

There are plenty surrounding this home but it will take awhile to take the non licensed down.

It just seemed like a good strategy since these were government backed rental payments

They lived subprime and are still haunted by mistakes the government made along with greedy lenders.

If not, then serve the non-renewal and prepare to turn the unit as efficiently as possible to reduce costs and vacancy.

There’s a separate kitchen and living space on each level, acting as a non-conforming up/down duplex. 

Certainly not afraid of it -- the government red tape is Partly a question and difficulty removing a bad tenant is probably he biggest downside - that goes for any property though.   

Most every lender on this board can do both conventional, non-qm AND DSCR. 

Storm sewer, storm pond, sewer lines, water access, fire hydrants, public bathrooms, surface coverage, sidewalk or bike paths, setbacks, power lines and right of ways known and unknown, road access, etc. 5.

Days wind down and now they have a (knee jerk) reaction and buy something non-optimal for a property just to avoid tax penalties.Had they been realistic starting out they would have had time to locate quality properties to buy instead of looking for a Unicorn.