Quote from @Brandon Croucier: Financing a commercial MF that runs as an STR is possible.Appraising a property based on the income is not, whos to say a buyer would STR the property. 

Based on our preliminary plans we should be able to relatively easily convert the basement into a 3rd unit or just rent the 1st floor as a duplex down 4bd.

Prices a few years ago were based on expectations of (in addition to interest rates staying low): - Then current operating cost assumptions (like insurance cost expectations being flat)- A seeming disregard for record levels of new inventory / supply hitting the market- Extremely high inbound migration expectations which are likely to not be met, due to both natural disasters and the boomerang effect when people from California or the Northeast move to the American South and hate every minute of the humidity, the large and relentless swarm of insects, and the occasional hurricane. 

Since you know what you need to buy it at and an average rehab cost, I would say $50-70k for a cosmetic flip, set the ARV based on the sample you choose and doing comps and ask them if they would invest in a deal similar to this. 

In high-cost markets like Chicago, that can be tough to meet.If you're looking at a duplex, the self-sufficiency test doesn’t apply, so you’d just need to qualify based on your personal income and the rental income your lender allows.If your current lender isn’t familiar with making FHA work in your situation, it might be worth getting a second opinion from someone experienced with FHA multi-unit financing.

@Eric L ConryI would base it on your cash flow NEEDS, not wants.

for water stuff - if it is not raining based on ur experience how else one can test that?

And I'd argue the average rents can be increased nearly 30% based on the current FMRs in the zip code.

Louis, Missouri, and based on the numbers, it seems like it could be a great fit for Section 8 tenants.I’d love to hear from anyone with experience in the St.

@Daniel Baker I would say a lot of it is based on their training or their resources that they utilize to complete your taxes.