In the 90s Dane County had the reputation of being called "Republic of Dane County" among rental owners because their rental laws were so vastly different from most others in the state. 

Are you doing owner occupied loans only?

Just wanted to hear out other STR owner's experiences with navigating these ordiances.

However, in the event an owner has to be the GC of the project, don't pay a day rate to subs.

In general I would appreciate any advice in this endeavor, and any other help regarding financing as a first time home buyer in an owner occupied space in NC would be great as well.

So look around, interview other STR owners so that you have sufficient information.

I proposed a couple owner financed terms to them and they returned with this one:Sale Price: $300,000 $25,000 Down. 3% interest. 5 year balloon. ($244K ish) This is obviously far better than any bank can give me with interests rates around 7.5% here non owner occupied.

I go to look at a property Thursday with a contractor to do my own due diligence, the property the owner wants 45k with an ARV OF 90k-120k.

Property that generates rent and that the owner has personal use of (your family member) can qualify as investment for a 1031 exchange easily enough. 

Is the 1st - year owner occupied negative cash flow worth it.