It seems like your ROI is basically the same in each option, but you are taking on a much bigger project to convert a single family to a four-family.So basic calculations, since we don't have a full financial picture, i.e. what does financing of each look like?  

Do not wait for the 30 days.A couple of options to raise money: If you receive at any given time a return during tax season.

Quote from @Harita Konjeti: Tenant has not paid entire rent for first month, do I have any other options other than charging late payment? 

@Rick Soto,Both options have their pros, but here’s a way to think about it given your plan to move in 5 years:Option 1 (10% DP, 2-1 Buydown): This gives you lower payments for the first two years and saves you cash flow short-term.

It'll add about 80k to the cost but is a much cheaper option that tying up square footage for an indoor pool and dealing with the risk of moisture and mold issues.

And then it might have the option to extend it to a nice round 5 years if/when the current tenant extends. 

I'm looking to start off in areas with lower costs coming in, preferably under $100k single families but definitely under $200k.These markets are particularly appealing for novice investors, especially those from California, as they offer more affordable options compared to local alternatives.

Give them a portion of the profits from the STRs and have a buy-out clause when you have the funds to refinance.I am sure there are many other potential options for you to look into, but just off the top of my head these 5 came to mind.

If this is financing for a stabilized property rate carries more importance but rate combined with origination fees, pre-payment penalty and term in which you intend on keeping the loan in place are all considerations which together should help in deciding the best financing option.

Quote from @Shawn Nofziger: I have quite a few options in my areas to bid on foreclosed properties.