It could be either a coop or a condo - in a coop you own shares in the buildings corporation that entitle you to occupy a specific unit, in a condo you own the physical space. they'll have either maintenance fees or HOA fees as an additional expense, and these can go up whenever the board voted on them.

How difficult can that make obtaining additional financing?

I plan to do work on the house in several rooms during that year, but it would be nice to have the additional income to offset costs from renting a room or two. 

I am looking at renting the master suite out and stumbled across someone interested in renting a room part time so might also rent an additional room like that to them if we can figure out a price that works.Then I ran across a FSBO in a great rental area...

Perhaps could I pay additional $ to HUD to agree to turn on the water...or is there another (legal) way to go about it?

So what I was wondering is should I sell the property and then buy another home to live and and addition to a rental property.

In addition to BP, you could find a realtor at REIA meetups in your area.

I find many of the "better" neighborhoods price points, Such as New Scotland, Upper Western Ave, etc. the numbers hardly work if you’re keeping a flat to yourself unless you’re renting out additional rooms in your unit.

Currently, I am mailing letters, and I've sent out postcards in addition to driving for dollars.

Welcome, In addition to what was said you can join a local real estate group in your area.