You could do that for 3-5% down.. live in it for a year to meet typical requirements for use… then move into a new house, and ‘voila’ - you bought your second (multi-family) rental for 3-5% down instead of 20-25%.It is entirely possible though that you will face debt to income issues on your first rental if your lender wants to see a year or twos worth of rental history before counting your rental income to offset your debt payments…so beware of that.Otherwise you may have to look at creative financing… maybe bringing in a money person where it was a short term investment for them, like “I’ll give you 8% on your money (versus the 4-5,% you could earn from the bank CD) if you will partner with me on this purchase.”

They will take an unpermitted, converted ADU and add it straight to the heated sqft, and bedroom/bathroom count when running numbers.

I am in negotiations on a new project and I was really counting on being able to tap into that money. 

If the loan is serviced in this way, the loan won't count against your DTI after 1 year, should you want to purchase another home later on. 

I can't count how many times I met with a seller and said my commission is X% (and I'll pay the buyer's agent out of that), and they replied that so-and-so says they only charge Y%. 

Count your no's and eventually you'll get a yes

I think the answer to this question really depends on a few factors such as your current unit count, location of your properties, long term goals, and how much of your income is based off of your units. 

You will have the odd desperate seller like an American who took a mortgage on his US home to buy a property in the Dominican Republic and was counting on the rental income in the Dominican Republic to pay off his mortgage.

Remember, the seller is counting on this to close as well. 

A primary residence does not count for 1031 exchange purposes, so you would need to reinvest your capital gains from the rental portion of the 2-family into another property or DST in order to avoid paying taxes.