Or you can buy a primary residence with a USDA loan for 0% down and then rent it out after 1 year.

Lender's Title insurance seems high, but that could be because of location.

Currently own a 2 unit as my family primary resident (current not rented, temporarily reverted single family).

College rentals can produce huge rents, I have clients to this day hitting 1% rule with student rentals. 

It’s a SFH and I don’t rent it by the room, but I bet State Farm wouldn’t have a problem with it on this type of policy.I ended up with this policy after searching almost 6 months for someone who would cover an STR in a high wildfire risk area.  

How do you determine the property should have an NOI of $400K without raising the rents?

Property is rented for $1750 per month.

You can pull that money out, rent out the entire property, then go to the next.

So we thought of giving it for rent. 

Real estate only gives you returns worth the hassle if you do the hard work of forcing appreciation or benefitting from leverage + appreciation over time in a solid location.