G'Day Alejandro,As a few have already mentioned, take a peak at Toledo also.In my opinion lower potential for long term appreciation but solid/"boring" cashflow.I prefer my portfolio to be "boring" but cashflowing lolLow entry points (Sub $100,000), high rents (Above the 1% rule).Blue collar working class decent folks that will stay and pay.Depending on the area but no derelict homes, yards well kept, cars with wheels and all tenants are employed.Plus, all are sophisticated enough to pay rent online so property management doesn't have to collect rents with bullet proof vests and shot guns lolI'm bias toward Toledo but it's worth considering.Wishing you much success

Since you’re considering converting the upper unit into a short-term rental, you may also want to implement strict rules around smoking or strong odors in your house rules to avoid future issues.

His "owner occupied" loan application is ok if he intended to live there when he applied.

Do you have a potential DSCR scenario that you're looking to apply for? 

You can self finance or you can apply for a DSCR loan.

However, you can still find real estate markets that have both positive cash flow (aka hitting the 1% rule) and strong appreciation potential. 

The risk of "piercing the veil" applies more to LLCs when personal and business finances are not properly separated, not necessarily to individual landlords renting a portion of their home.A more practical approach is ensuring you have a solid lease agreement, sufficient liability insurance (including an umbrella policy), and properly reporting rental income and deductions on your tax return (Schedule E).

Apply here: https://airtable.com/appnZ2AGUknfciOzu/pagvbFaEPNprDBVKi/for...

Your GC will know how to apply for the correct permits.Avoiding the issues in the future is a function of respecting the permitting process in the first place.  

Courses and webinars are great if you're getting basic information to help start you off, but you'll never truly retain the information if you don't apply it.