Generally no non-conformance (grandfathered) aspects can remain unless it's untouched exterior item.It has to make sense for the numbers.

BTW, as a contrarian investor, a decade ago I looked at non-conforming condos as 'raw meat' in an otherwise highly priced market.

I'd suggest buying something cash - perhaps a potential BRRRR project - to see if you really like being a landlord before taking out a bunch of non conforming loans. 

Hello,What i usually do, is to set a side "emergency fund" of X amount of dollars...whatever you are conformable with and then start taking 5% capEX and 5% maintenance of the monthly rent

While in very conforming homogeneous market with plenty of relevant data, that # may be close to an actual market value, it is much more difficult to do in most markets, especially with a townhome or condo. 

I’m working on a deal for a non conforming lot with a 1, 2 and 3 family building on it.

Conforming loans will require owner occupations.. 

The property is considered non-conforming do to its size so I would have to get a variance with the city even though it is zoned for ADU.

Legal, non-conforming zoning is permitted by both FNMA and FHLMC.

It can definitely be done, but be aware that it will generally cost much more than simply building a conforming home on the lot.