I want to purchase my sisters house as my first investment.

@Terrence StarkTypically the contract to buy the new house would specify that the builder/seller would deliver the type of plans you are referencing.

While I can imagine some cities might be against "boarding houses" or enforce their "brothel law" I can't imagine too many cities would be supportive of it. 

I bought 14 houses basically for free by harvesting the equity in my houses by doing 5 cash out refis.

To set the stage, I'm owner of a short-term rental property in the Poconos in PA and we use a property management company for bookings, maintenance/cleaning, guest management, etc.This past weekend we had a guest booking but when the guests arrived Friday evening the house had no running water, though it had been running fine earlier in the day when the Property manager (PM) was at the house to give a final check and leave the welcome packet.

I'm having a very hard time with them and on the verge of losing my earnest money on a house purchased to flip.

This is a similar story for house hacking a single home and renting by the room. 

Here are the key details of my situation:Rental Property Details (Note: This was our primary home till 2017):Current Value: $970,000 to $1MPrimary Mortgage Loan Balance: $505,000 (@ 2.6%)Took Home Equity Loan on this house to make down payment for my current primary residence.Home Equity Loan Balance: $123,000Total Loan Balance: $628K (Primary Mortgage + Home Equity Loan)Rental Status: OccupiedPrimary Residence:Purchased in 2022Mortgage Rate: 7.3%Current Loan Balance: $650KMy goal for 2025 is 2 fold: #1.

I am looking at different loan options but to break even (not having to put any money of my own in the house after the initial down payment) the current down payment required is that much. 

I don't think anyone predicted that.I've always thought for rentals it's better to buy a $250,000 house and hope for the chance it goes to $350,000 than buy a $500,000 house hoping it goes to $750,000.