Complete How To Figure Your Gain or Loss Worksheet .If the business or rental space wasn’t within your living space, such as a first-floor store with residence, an apartment with its own entrance (and kitchen and bath), or a working farm with a farmhouse on the property, continue to Determine whether the business or rental space still counts as a business space , next.Determine whether the business or rental space still counts as a business space.

I need parking for both units and seperate entrances to the homes. 

I’m also wanting to house hack with separate entrances/living quarters.

If the place is yours and/or has a private entrance, it will be much easier.

What makes it an ADU or JADU vs just more rooms in the house are permits you file with the local city to make it an ADU as well as providing separate bath and cooking facilities and a separate entrance.

We just bought a house a couple blocks from a university that has 2 bed and 1 bath down stairs and a efficiency rental unit upstairs with a separate entrance from the back.

If both floors have a private entrance maybe you could lease out similar to a duplex with some minor adjustments.  

As mentioned earlier, anything over 4 units are considered commercial and require different lending products that need a large down payment.You can see if there are any homes like you mentioned with a mother-in-law suite or some form of an ADU, anything separate with an exterior entrance.

Any entrance into Real Estate is going to involve some amount of upfront cost.

My main worry is finding a townhouse with a separate basement entrance as well as issues with accessing that entrance if the townhouse is a middle unit and not an end one.My plan is to live in this townhouse for about a year or two, move and rent the entire unit out, and rinse and repeat.