We tried asking him questions if there was any additional cost than cost of lot and any restrictions.

If they do not have restrictions-find a lawyer and file for eviction. 

I realize there are some pitfalls to condominium ownership such as having to deal with condo associations, rental restrictions and rules and regulations.

If you're planning to target short term rentals know that Orange county has restrictions against this if you aren't living in/on the property premises. 

Make sure you read the condo association rules regarding rentals carefully (rental length, restrictions etc) before purchasing.  

I have two kids, so I'm giving extra caution to this step.Is anyone aware of any Indianapolis restrictions for house hacking (renting out rooms), or any other thoughts/recommendations that come to mind for this scenario?

Usually there are a lot less restrictions across the board.

There may also be restrictions on purchasing a second VA property in the same area without mitigating circumstances.

Rents have increased and cap rates have dropped, but there are more regulations, restrictions and expenses in recent years.I am looking for an area with a growing population, diverse growing economy, and valuations less overheated than those at home.  

If so then add your restriction one at a time until it says no.