The other reason why you would choose option 2 is that no investor would ever buy #1 and the bank might have trouble financing a deal where the revenue can be iffy.  

For example in many jurisdictions I can STR units in a duplex but cannot STR an ADU (some jurisdictions will let you STR if you owner occupy).

Its why I have been able to rebound with bank loans for my new construction .. and of course back to work funding fix and flippers but just a smaller version and much more particular thats why I would never fund anything in most parts of Jackson every again.

Instead of just buying into a training/coaching program for $8000, (That is what cost as of yesterday) they have a bank and financing available to the group that seems to be unique. 

Just called one of the banks and they require a business plan for a multifamily, is that typical for a lender?

New Garage door on detached 2 car garage.My mortgage company is Citizens Bank and from looking at their rules for PMI cancelation(per google AI) they are:"Citizens Bank will automatically cancel private mortgage insurance (PMI) when your loan-to-value (LTV) ratio reaches 78%.

What is this exemption for "Banking" ?   

I work for Northpointe bank.  

I am fairly confident Tatum McDaniel at Jacksboro National Bank said they can, but I believe she said 25% equity must remain.

How do you effectively determine this and how do you propose to the bank to support your rehab costs (again guessing this has to come out of your pocket?)