By doing this we qualified for a larger mortgage because we could use the rent from the other tenant to qualify and there are better lending programs when it’s “owner occupied”.  

Have an owner's closet, where you lock up your extra inventory so the guests can't use it. 

I had to explain to her that when I rent from you, I have temporary owner's rights and you can't just walk into my house whenever you want.

You are competing against other owners who have a much lower basis and/or debt cost to cover. 

I do appreciate you taking the time to respond regardless.The IRS specifically calls out owner distance from rental and having a property manager as a red flag that owner isn't materially participating.

You paid the property owner $40,000 in rent.  

I'm calculating for prop management even though I would likely owner-operate because I need to make something off the deal if I am focused on cashflow, especially if I scale and actually need to hire a manager.Given that interest rates in the area are about 7% and prices for single family and small multifamily have doubled (and tripled) in 7 years, the barrier feels way higher than it really should be.

Call the mechanic or gas station up the street and ask the owners if they know someone.

Can anyone recommend sources for contact information for property owners?

Some types of Creative Financing include: Seller/Owner Financing, Land Contract, Wrap, Assumption, Subto, Lease Option, Contract for Deed.