I have cash on hand and no issues paying 25% down. 

Hi Michael,It is great that you are doing this together, I read some great tips on here, something I wanted to add:I have been checking a lot of 2-4 units, in the past it was not easy to find them in good areas.During COVID, a lot of investors decided to build these types of units which is great, but not all builders are great, I had a client, he purchased 2 duplexes in the same area, we had some pricy maintenance issues, one was with the plumbing.

FHA is tough on a few things like "Chipped paint" any signs of chipped paint will stop financing and need to be addressed (Painted), Loose or missing hand railings, Water damage, Mold, Termites, Outdated electrical or any wiring that is exposed.FHA will also stop you dead in your tracks if the appraisal shows anything that is considered a "hazard or safety issue" and must be fixed.

https://www.car.org/-/media/CAR/Documents/Transaction-Center/PDF/QUICK-GUIDES/Quick-Guide--Cannabis-Marijuana-Issues--Sale-of-Residential-Real-Property-revised-22822.pdf

@Dominick Tonnarini, The only issue with your plan is that you will have to pay a sizable tax on the sale of that property when you do sell. 

Rent by room is doable but tricky and possibly could lead to other issues.

Section 8 tenants will generally not tell you issues in the property and then tell everything to the inspector which gives you a short period of time to get a lot of work done or you will get abated and lose the rent for that portion.Section 8 tenants are MUCH harder to evict than normal tenants.Happy to talk more about this if you want. 

Unique features boost value, but issues like pests or noise may not be accounted for.

in future I won’t put down 10k deposit neither. as far as what I know that sellers agent said they have another offer on hand, that wasnt too long after the price drop to 224k, i might have trust issue but maybe she made it up?

I have never had squatter issue here.