You still have the same one property, but extra work to deal with a tenant.

My only 2/1 had a converted garage with ducted AC that makes an extra room.  

I am familiar of the process for changing occupancy and the potential need for a special permit from planning, and the possibility of triggering the need for a fire sprinkler and fire alarm system.

(Not a live in flip) He also was wondering if he should refi his house, pull 75k out, pay the vehicles off and put the rest down on a new house. rent the original house out and take that money to pay the refi mortgage, the rent would cover the mortgage plus an extra 150 per month ..I’ve been telling him about refining his house and use that towards a BRRRR or some other real estate investing.

Here is the quick pros and cons on both.Gloucester: Pros -  Good tenant pool, strong schools, most houses have public utilities, consider the more desirable area of Sicklerville by the local populationCons - higher taxes, pulling permits takes the full ~21 days, higher home prices, overall thinner marginsWinslow:Pros - Lower cost houses, rental friendly township, strong demand for rentals, slowly up & coming in certain neighborhoods, lower taxes, overall fatter marginsCons - Lots of C and D neighborhoods and lackluster tenant pools, poor schools, the more east you get the more well/oil/septic you find, considered less desirable area of Sicklerville by the local populationBy the numbers both GC and WT have similar rent rolls only off by $100 to $200 depending on the house type, therefore Winslow you will net more but have a slightly riskier houseAgain this is just a general view, you'll want to look at each sub-division as there are massive swings within each twp (Ex: Brittany Woods compared to Cobblestone in GC)

As it stands I'm set to close Wednesday, then will refi in 6 months to get that $8k plus hopefully some extra back out. 

We can generally obtain an extra $100 or more per night when including use of the dock (never the boat) as well as kayaks, fishing poles, etc. 

It is available only for properties being held for investment.They would qualify for the sec 121 primary residence exclusion once they have lived in the property long enough that they can claim residency for 2 out of the 5 years immediately prior to sale.You could certainly enter into an option and cooperation agreement with them that would allow you to pursue the entitlements/permitting you might need. 

Emergency escape and rescue openings shall open directly into a public way, or to a yard or court that opens to a public way.Garages cannot open into bedroom/sleeping rooms requirementR302.5.1 Opening protection.Openings from a private garage directly into a room used for sleeping purposes shall not be permitted.

I've thought about putting something weird in the ad before - "5-armed martians require extra deposit", but I just let it roll.