Owner occupied loans have allowed us to purchase properties in markets with heavy appreciation, and potential for huge rent increases.

Fully occupied.

One kitchen is for a subletter that occupies one level of a duplex. 

Hi @Dave Tab yes for the low money down loans as far as I know you need to be able to show you are occupying the property.   

While they apparently only subletted the back room from the previous tenants, they now occupy the whole house freely without paying any rent, and we've been unable to file an unlawful detainer due to the eviction ban even though we posted the notice in mid-February. 

But Scott is doing something other than what you do, which is seller financing owner occupied homes.

Single-FamilyThe supposed advantage of multi-family properties is that income from occupied units can mitigate vacant units.

Total number of people that would occupy the apartment5.)

From google: “The Fair Housing Act (FHA) does not apply to certain types of rentals, including: Owner-occupied buildings: If the building has four or fewer units and is owned by the person who lives there Single-family homes: If the owner rents or sells the home without using a real estate agent, and they own no more than three homes Religious organizations: If the property is only available to members of the organization's religion Private clubs: If the property is only available to members of the club Senior housing: If the property is designated for people who are at least 55 years old Even if a property is exempt from the FHA, it must still comply with the law's ban on discriminatory statements, notices, or advertising.

You can only play games for so long.Chances are your next door neighbor is an IRS agent and turns you in when your tenants blocks their drive or some other random event disturbing your IRS neighbor.ADU catches fire and your insurance won't cover you, because it was an illegal and unpermitted structure.The city inspector told the last guy not to build or rent it, and is now pissed and wants to make an example of you and just red tags the whole property and no one can occupy for the next 1-2-3 years while you wait for a hearing.Then when you get the hearing, "staff" recommends you tear the whole structure down, and if you still want an ADU, you can apply for a permit and rebuild it.Your tenant quits paying rent and won't move out and you can't evict them, because there is no valid lease and they're just your "roommate".Probably a dozen other bad things can happen to you when you do stuff like this.