Ultimately, as we get older we convert wealth, or RE equity into assets that produce cash flow.

I was considering ripping out the carpet (has some tough stains), installing new vinyl wood floors, repainting the walls, do a thorough deep cleaning, and converting the loft room back into a bedroom (putting up the top half of the wall and putting a door in), and then finally rent out the townhouse.

But when you drive around Alameda and you see the worse looking houses and many were converted to multi unit.. the worse looking ones were Jawads.. basic slumlord I guess.  

What my wife and I ended up doing is remodeling the house with an addition and converted the garage into an Accessory Dwelling Unit (permitted and rentalble guest house with separate address and electrical meter).  

So unless you go under contract before the 28th you will need to do FHA or find an alternative FREDDIE MAC HOME POSSIBLE® BORROWER INCOME LIMITSOur Freddie Mac Home Possible® offering serves low- and moderate-income Borrowers looking for low down payment options with flexible sources of funds.Currently, for all Home Possible Mortgages, with the exception of those secured by Mortgaged Premises located in a low-income census tract, the Borrower's qualifying income converted to an annual basis must not exceed 100% of the area median income (AMI).

Purchase price: $267,500 Cash invested: $53,500 This is an old 2 room school house that was converted to 4 units.

Should you ever decide to convert the place to condominiums, your water infrastructure will be in place.

Finding a home with an unfinished basement you can rent out, or a garage that you can convert into a living space may be a better way to go...or a home with a lot of bedrooms that you can rent out. 

Building #2 - Old large home converted to 4 plex.

The house has a swamp cooler and the only part of the house that stays a little warmer is the converted garage.