I "flipped" the house I used to live in (and rent rooms out of), and currently run an Airbnb in my second house. 

To my knowledge though, I would need a 20% down payment in order to avoid having to live in the property.

To pass the exam I recommend you take "Real Estate Trainers" Live Crash course.

Where do you want to live? 

The operative word is that you "intend" to live in the property for 3 additional years.

I have zero experience in this area and I live out of state.

New Member here, I live in palmetto, I'm looking to grow my business, I'm new to real estate investing but not new to home investing, I own c2cmobilehomes.com amd sell roughly 400 mobile homes a year but all on rented land, I'm in the middle of my 1st real property investment, hoping it goes good and I have many more in the future, if there are any wholesalers in the area of manatee Sarasota I'm looking and ready to buy rehab properties... 

However, we backed out of said deal because we found out we would only qualify for a certain amount of money on a second loan that was way too low for the market I live in.

. - a home can pass an inspection but once someone is living in it and putting daily stress on the house (turning faucets on, light switches, turning on heat/AC etc), things can start to malfunction.

Looking to buy a SFH in one of these counties, with the intent to convert a basement into an ADU and rent it out (short or long term) - and live in the main unit as owner-occupied.