Hey Santosh,As of right now you're extremely exposed regarding insurance and I'm going to assume legally as well.If the home isn't registered as a legal multi-family with the town that's something you'll have to correct ASAP and make sure the home is up to code.Insurance wise as soon as they find out what you're doing they'll cancel you as the risk has changed from a single family owner occupied home to a multi family owner occupied home.

Quote from @Michael Smythe: @Sean Gallagher legally you are correct, but many tenants do NOT know this.We take over properties all the time and close 80% of existing tenants sign a lease with us.True! 

I prefer graduate students whenever possible because they don't have time for partying, are of legal age anyway, and generally tend to be by themselves or with a partner so it's more like renting to a couple.

You are perfectly legal and right to do so.

That's a technical banking and legal term.

Weeks later, it was communicated to us that the underwriter wouldn’t accept the ones signed by only one of us – legally binding for LLCs – and required we send amended copies of leases signed by both of us.

@Tim Holt Come February, it's legal to create an ADU by-right on any single family property in the entire state.

For legal, we can provide you a list of attorneys out there who do this and my recommendation is to interview them to see which one you feel works best for you.

Obviously one would still need legal and accounting support. 

Stop hanging out with your deadbeat buddies who spend all day drinking, talking sports, and otherwise wasting away.