Current zoning does not allow, but city tells me re-zoning is likely allowed and done all of the time.  

Convincing her of this avenue is merely the first of many steps. 

And at 3.5% down and throw in some closing costs, I'm looking at a mere $20,000 outlay.  

Only one side of the duplex is currently rented out, and to a Section 8 tenant playing a mere 800 per month.

Yeah, my experience merely living in an HOA has been awful.

I certainly don't want to come off as the buzzkill on you here, but the mere fact that you are asking these questions on Bigger Pockets shows that you have no business biting off a project this large.  

@Ken Graham    when a regulator wants to tag you with their version of whats lawful or not... its not up to them to prove the case.. you either acquiesce or you take the case to the law judge.. and you pay thousands if not 100's of thousands in attorneys fee's to prove your case.. rarely if ever done unless its a public type company... all of us mere mortals just take what the regulators say and move on...

If not, your purchase will not require any special due diligence as you are merely buying an asset from the estate, not equity of an heir or beneficiary.

For now I am jumping from market to market because I am still starting out with limited capital and merely shift markets when I get priced out of an appreciating MSA.  

Perhaps there is an issue with me relying solely on documents provided by PM company stating rental incomes etc vs actual copies of leases or other info substantiating rental income)?