@Carrie Albertson I would consider how old your dwelling is.  

For instance, there is a small city here in CT where right around the area where the university is they only permit a certain amount of non-related persons to live in a dwelling. 

A lot of our clients and even my parents have invested in building a guest house/2nd dwelling unit on their SFR property.

Has anyone sought after single family dwellings with a crawl spaces and the intention of digging out a livable space under the house?

I'm putting together a lease to rend out my carriage house - attached dwelling unit but separate entrance from the main house.  

@Evan BellI pay about 3% of gross rents for a standard rental dwelling policy and a $1MM umbrella policy for a 2 unit side by side in Southern California through AAA. 

. Ownership of a multifamily property consisting of more than four dwelling units. Joint or total ownership of a property that is held in the name of a corporation or S-corporation, even if the borrower is the owner of the corporation and the financing is in the name of the corporation or S-corporation. Ownership in a timeshare. Ownership of a vacant (residential) lot. Ownership of a property that is held in the name of an LLC or partnership where the borrower(s) have an individual or combined ownership in the LLC or partnership of less than 25% and the financing is in the name of the LLC or partnership. Ownership of a manufactured home on a leasehold estate not titled as real property (chattel lien on the home).

I'm willing to go the FHA route if I can find a duplex or house with another living area, but if I could find a great deal on a single family dwelling for an investment property, would it be possible to avoid an FHA loan without 20-25% down? 

I had a State Inspector check it out ($54) before the utility reconnected at the street & had his inspection report sent to the Town & my insurance carrier.I then completely rewired the dwelling to eliminate all the old < 1970's Al runs that were common back then.

You may be able to come across an investment around your price range that is a multi unit dwelling.