We’d like to assemble a real estate portfolio over the years, and would consider buying a rental property whilst living in our current home.I’m looking for any creative ideas or suggestions given our circumstances.

I would like to be able to own a multi family unit (4units or less) where I can live in one of the units.

Maybe you’ll get lucky and they’ll outright ban STR o require you to live in the property so you can ignore this strategy.  

Even if I'll live in this duplex, I plan on only living in it for a year.

I now have a family including five kids at home so living in half a duplex is not practical. 

Usually these investors are looking to do live in flip as their primary residence.

It also stays off of your personal credit/DTI which will help you as you live your life outside of these properties.Those will be a specific set of lenders that you will want to look into as many of them have different requirements that you would have to adhere to, but overall much more of a simpler process than your conventional lenders, while being a couple of points higher in processing. 

Hello:I got a quote for converting a 16x10 living room into a bedroom.

If you use the search function, there are a number of threads on this.Pros-you can rent by the room and make more moneyCons-students are often less experienced at living on their own and may do things that result in repairs (eg wrong soap in dishwasher), higher turnover, more calls to deal with things, higher chance of parties.If you do it, you may want to get a cleaner in once a week to clean common areas (students clean their own rooms and keep the place tidy, wash their own dishes) and you will need to get someone in to take care of the yard.

I will live there for a year (It was an REO and I signed an addendum that I have to live there at least a year) while I complete the remodel and then rent the property out to establish cashflow.