I could see the issue with a large claim if that wasn't the case.

However, I've called a range of lenders (banks), small and large, and so far none of them are willing to issue a HELOC for non owner occupied investment properties. 

can you actually scale this into a business...

I can't scale the single property! 

In terms of reaching your goals, you need to scale up.

We'd like to repeat, but prices are rising and saving for the large down payment is slow going.

Also from following the local forum's it does seem to be a large amount of people investing in Rochester from outside the area through local PM's.

We never looked at it as an attic as it consists of three finished rooms (2 large and 1 smaller) and a small bathroom which has a small tub, shower, sink and toilet.The second floor can be assessed by a stair case in the front of the house, and a staircase in the back of the house.

The attic is quite large with private space and has a kitchenette with mini fridge, microwave, and kitchen sink.

Finish quality, Large system replacement (eg. roof or electrical) can all muddy the numbers.