Both CC and FM have seen exponential increases in inventory – almost doubling 80% and 90% (this converts to 10+ months and 7+ months of inventory), days on market 70% and 160%, and new listings 62% and 24%.

however - distressed properties aren't typically purchased with a conventional loan; they may not even qualify. 

Call your servicer to start the conversation, the terms are dictated by conventional loan guidelines so this will be what is applied:https://servicing-guide.fanniemae.com/svc/d1-1-01/evaluating...

In Chicago, there are quite a few buildings with illegal garden units, and I thought it might be possible to live in one of those while I'm trying to make it legal with the city but would that be against FHA guidelines or conventional loan requirements?

This is a strategy I've done myself with 5% down payment conventional loans. 

I now have 2 houses both in conventional 30 year loans and i have 2200 a months in mortgages in my name but im doing ok cause im cash flowing pretty positive on the monthly.

You can put a little as 5% down payment for conventional or 3.5% for FHA.Alternative way, is to acquire the 2nd property as an investment property with conventional, while putting 15%-25% down payment.

So real demand up, but inventory even more up.

Here are some specifics:Purchase price: $955KSeller Finance offer: 20% ($190K)Reno cost: $90K Ideally we would like to do a Morby Method where we purchase the home via conventional mortgage or hard money lender and on the back end have the seller lend us the $190K with a second position lien on the property and a 5-year payback.

Now, anyone can access their inventory and resources (i.e. independent lender that works with them, financial company, etc.) but if you are an Academy member, you get exclusive access for 24 hours on any new properties that are posted.