You may qualify for exemption, but definitely check it out as that could cost you way more than the repairs if you are in violation.    

@Fernando EnrileMaybe look into buying a multi-family property (1-4 units) and that way you can use the rental income to help yourself qualify - the multi would need to be owner occupied (house hacking).

These units were cheaper to buy, but are much harder to rent (especially to qualified tenants). 

Staying out of the high crime and some of the extreme high end areas is our goal, supply is low right now, but plenty of deals to be made especially for those that are house hacking, or have skills such as rehab experience.

Also most of the time people seeking owner financing would not qualify for the best rates from a bank if at all due to high debt or other factors, thus the owner would not and should not treat that person the same as someone with great income, no debt, and stellar credit. 

In order to qualify for the Homestead Exemption from property taxes you must own and occupy the property.

I'm just trying to get where you are :)  I think I have some more learning to do to that ends, although I've overseen some large renovation projects, I just do not feel qualified to make judgment calls on entire houses. 

Can I qualify for FHA now?

If you delay the sale of your former residence unit until it has been more than 3 years since you vacated, your former primary residence becomes an investment rental and you no longer qualify for the §121 capital gains exclusion on the sale of a primary resdence.You can use a 1031 exchange to defer capital gains taxes on the sale of the investment rental unit since you are planning to use some of the sale proceeds to invest in another rental.  

@Jim Brandt , Unfortunately, a house that is in your name and used for personal purposes for more than 14 days during the year, or more than 10% of the number of rental days if greater, is considered to be a residence (not a primary residence).You are deemed to have used a property for personal purposes when it is used by: Anyone who rents the property for a price that is less than fair rental value.So the house will not qualify for rental property or investment property.