So, in that vein, you can find a home a builder thought was perfect with the extra spaces maybe 70 years ago and convert them into bedrooms.

I’m sure that will eventually catch up to me and I’ll have some problems but I feel the increased tenant pool outweighs any negative.

Another example is converting the garage into an Accessory Dwelling Unit.

This means you retain the tax benefit of claiming active losses now without converting future passive income into active income.4.

In order to benefit from a 1031 exchange to defer my taxes will I need to convert my primary residence into a rental property and if I do, what's the minimum amount of time that I need in order to hold it as a rental to make sure it qualifies for a 1031 exchange?

Unit 1 is currently 1B1B and unit 2 is 4B1B, but the listing agent said the 1st unit could be converted back to the original 2 bedroom making the 2nd unit a 3 bedroom if wanted/needed.

We are looking to acquire an SFH that can be converted to a multi-unit duplex or a SFH in need of rehab that could be converted to a multi-unit duplex.

Analyze the property's income potential and expenses and see how it shakes out while you live there and when you eventually move out. 

Look at that option, pencil out the numbers and see what makes sense, still flipping and getting hit with a PPP or convert to a rental and hold it.  

Later you could convert to student housing.This is rock-solid advice.