I actually think it is a benefit to both parties to have professional representation to assist the seller and buyer with these types of transactions.

As long as all parties are aware of your intentions, go ahead and get it done. 

If you have equity and decent credit, a conventional Fannie Mae HomeStyle (or the Freddie Mac version) would likely be the better option instead of an FHA 203k loan (which will require a 3rd party HUD consultant to oversee the deal in addition to having the contractor involved). 

My property, however, has a 17,000 sqft lot, which offers potential for a future multi-family development.

The absence of a personal guarantee from any disqualified persons is still required, just as with third-party financing.

You'll likely also reduce your cost of living by moving to a stabilized apartment.Depending on the cashflow and debt paydown, you can use this strategy until you've built enough equity to reinvest.On the other hand, getting into a multi-family after refinancing will also help you build substantial equity to rinse and repeat in the coming years.

The only way I could see that he could is if it was a multi-family property, but you'd probably only be able to apply it pro-rata towards the units he did NOT live in.4) If your AGI is < $100k, the max is $25k.

Investment Info:Small multi-family (2-4 units) buy & hold investment.

As we all know, the standard way BP says to calculate cash flow actually leads investors away form long-term opportunity and leaves a lot of investors on the sidelines because they don't understand IRR and the multi layered dynamics of investing long-term.  

Additionally, they should be helping with taking video walkthroughs of the location and the property, estimating renovations/scope of work, helping you learn neighborhoods, building your real estate team, etc.