given your experience, I would assume that you're OK with a slight to moderate level of rehab?

It's most common in the north-east.I assume you'll hire a home inspector.

You're also assuming no defaults, or nothing going awry.

My advice would be to underwrite as many house hack opportunities as possible and assume 100% vacancy + a large capex item so you stress test your worst possible scenario and can you get through this.

I think it is trash and assume the tenant doesn't want it, does not meet that legal requirement.

I assume you’ve got a loan that says you will be living there.

If they’re underfunded, you could get hit with special assessments.Not sure about the exact contract with the tenants, but I assume if there is any additional assessment, it would be tenants’ responsibility.Since you want to stay local and focus on cash flow, commercial makes sense, but have you considered industrial or flex space? 

This has become very commonplace in the Seattle area (I'm assuming your property is there) for many years. 

Now this depends on how much you want to raise, if its $1M yeah that can be done, if you go above $5M you are gonna need to spend money and I would assume someone starting out 10% of that amount to get there.

Assuming this is an 8 cap neighborhood you'd have a ~$420-450k value within a year (unless property taxes are crazy high) when leases would renew since it'd be valued as a commercial building with the office space.