Nothing wrong with that as long as you understand and are ok with it.

They are not a realtor and up to the standards of a realtor.

I know property managers in every state who use non-refundable application fees and it is the standard for every class of property and applicant.

I suspect you spoke to bank employees who weren’t in their commercial lending division and didn’t understand your borrowing request. 

Unfortunately - there are a couple of issues here that likely make this hard to finance:-"Cabin style" dwellings typically are difficult to finance as the secondary capital markets treats these differently than standard single family homes as the buyer pool for a "cabin" dwelling is less than that of a standard home.- Yurts: Lenders typically have difficulty financing Yurts as they are moveable collateral.

Above that, though, I would focus on standardizing your renovation, i.e., same tile, paint, flooring, etc.

@Heather Bailey while I live in my duplex, I have a standard Hazard insurance policy and I also carry an additional 500k umbrella policy (optional); both policies cover the entire building, but there's no separating it. 

Some quick googling suggests the answer is yes provided I don't rent it out more than 180 days for the first year, do I understand correctly?

@Adam OrtizRecommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Getting it under market value would be a bonus.So, would using an FHA 203k renovation loan, which would allow me to buy something unqualified for a standard mortgage, which would weed out a lot of competition and push the price lower.