I am married with 2 kids and about to have a third soon.My sister lives in the KCMO area, specifically in Lees Summit.

I would then plan to use this forced equity (since I plan to buy a fixer upper) to invest in another home.I have been constantly reading to househack right into the MFH, but this may take some time for me to acquire the money and purchasing power.

Are there any potential issues with this plan?  

They are not getting along and one has told me they plan to leave the relationship. 

@Eran WithanaI recommend finding an accountant who specializes in real estate taxation, tax planning and financial planning.

I would then plan to use this forced equity (since I plan to buy a fixer upper) to invest in another home.I have been constantly reading to househack right into the MFH, but this may take some time for me to acquire the money and purchasing power.

We're planning on turning the garage space into another unit with the goal to get it zoned as a duplex.  

What was the specific reason for the loan denial? 

@Srini Malempati, there are many Columbus based realtors here, like @Remington Lyman, that can provide more specific details of North Linden.That being said, I have had many long term tenants in my properties over the years.  

My differing advice/thought is if you plan on being a doctor for most of your life, and your goal isn't to replace your income with real estate in the next couple of decades, sacrifice "projected returns" and do your homework on the risk for any deals you evaluate.