There aren't many 5+ unit properties trading in those areas, and the 2-4 market doesn't really trade on a cap rate basis, because it's very owner occupied heavy.

Would you have to wait until the current owner moves out...in a year...if they actually leave as agreed? 

Your local apartment owner association is a great resource for best practices for management and screening tenants.

We are currently searching for land and boy can I tell you I feel like the FBI with what I'm having to do to find land and contact these owners lol!

Since this is BP lets go with separate dwelling units (AKA condo conversion) where the owner does not have to live in the house.

Someone gets injured in the basement your home owners insurance probably will not cover it and the liability would be pushed back on you.Would suggest discuss the finish with a Licensed Contractor, Licensed Expeditor and maybe a zoning attorney in regards to adding a unit to current zoned two unit converting to a 3 unit.Also, when buying a two unit and converting it to a 3 Unit, read your documents with out knowledge of the conversion the bank holding your mortgage could call your mortgage.Let me know if you have any questions.RegardsJoe Scorese

If it's owner occupied, you could buy at as low as 3.5-5% down, which would qualify you for a higher value home.

I tried to owner finance it, but I didn’t have any takers. 

So, these restaurant owners are actually trying to SOLVE that problem for their business.Given it's you're only current applicant, there's some other options:1) What has their current landlord stated about them?

Is the new owner required to comply to these rules if a property comes with tenants?