However If you get caught leaving prior to that 1 year you won’t be able to apply for another FHA loan for 2 years (According to my realtor).I would also encourage you to look up new MIP rules.  

Generally experiences, and not stuff, are what make you happy.I would apply two rules to any purchasing decision.  

@Hiro Kitagawa, qualified improvement property has become a bit more interesting than your CPA made it out to be.Now, there is in fact a category for owners of non-residential real property called qualified improvement property (QIP) that as of 1/1/18 replaced the old qualified improvement property (yes, same), qualified leasehold improvement, qualified retail improvement, and qualified restaurant property classification rules, as well as includes some property that would not have fallen into those buckets previously.The committee reports indicated that QIP placed in service on or after 1/1/18 would be eligible for a 15-year depreciable life as well as bonus depreciation rather than the standard 39-year, non-bonus eligible method applied to non-residential real property.However, the law was not drafted correctly, i.e., there was a technical error, and the section of the tax code describing 15-year property (Section 168(e)(3)(E)) was in fact not amended to include qualified improvement property.So for now, strictly-speaking, in 2018, qualified improvement property is regular old 39-year property that is not eligible for bonus depreciation.We do expect that a technical correction to the law will be made, but for now the IRS has actually stated that it cannot guarantee that absent legislative correction it will accept the legislatively intended change in recovery period and bonus eligibility.Anyway, this is neither here nor there since you have stated you are a landlord of residential rental property rather than non-residential real estate.And this does not affect the application of 100% bonus depreciation to both qualifying new and used property place in service after 9/27/17 and before 1/1/23 that @Yonah Weiss pointed out.

I am new to BP, so to avoid breaking any rules of the forum, feel free to pm me.

I know there is a rule that you can only use the exemption once every 2 years so I'm just trying to get clarification.

I hear a rule of thumb is when financing, you need a 3 point spread between CAP and interest rate.

Would also like to know if there are any local state/ zoning/ tax regulations or restrictions with this type of investment? 

@Joshua SavageWhile in use by the IRA, the IRA rules prohibited the use of the property for personal use. https://www.irs.gov/retirement-plans/plan-particip...Not until the property is distributed in-kind (distribution) in your name whereby the IRA no longer owns the property and you pay taxes on the value of property at time of distribution will you be able use it for personal use.

It seems that all zoning and setback rules will allow this.  

You'll need a qualified intermediary and need to follow all the rules for identifying property.