@Mike Johnson you definitely have a different set of problems or potential problems depending upon where you are at.Brand new and acquiring your first rental you're going to manage:Everything can kind of be summed up as you don't know what you don't know.

To me, it's just inviting potential conflict that I don't want.

I'm exploring this as a potential investment and would love to hear from anyone with experience buying in JC.I'm looking for recommendations on good areas to invest in.

I even look at residential properties with key words for potential conversions to multi but those are also hard to come by.

Instead, the income (or potential income) of the property would be used for qualification.

Builders do this a lot to add extra potential sleeping area without having more bedrooms than septic is rated for.I have seen people put beds in the loft after closing or even close in this area to make an unofficial bedroom.Just be clear in your pictures and description and you should be fine either way.

If you can not find coverage with the agencies you have contacted, PM me and I will let you know the companies that we use that might do it.Because of your making payments to the owners potentially, I would look into commercial crime coverage and cyber liability. 

A 1031 exchange could help you diversify into higher cash-flowing properties or a market with stronger appreciation potential.

Which cities and areas do you think have the greatest potential for appreciation?

@Catherine Javier If you find the property is more of a liability to you and ultimately decide to sell, the 1031 exchange would probably be the best way to take advantage of using the tax and find something with a greater growth potential.