Compare that to what you have (Apples to Apples). 

I have a tenant who allowed a friend to move in with out notifying us prior to the move. 

If it goes through via non-recourse, then downside is less compared to recourse loans.

He purchased a home for a bit over $500k, and realized his mortgage is about $3100 compared to the rental market which was inbtween $2100-2700.

As well, you should not compare SFR or Residential MFR with commercial MFR.

But  as long as they're good tenants who take care of my property  and always pay on time I have no problem  continuing month to month as long as they give me 30 days notice  prior to moving .

For example, the property may need to be listed for sale prior to accepting your offer and may need to be in MLS prior to accepting offers, etc. so I do agree with the above comment that it is usually best to contact a local negotiator/attorney who can walk you through what the next steps are.

Just make sure you have the same loan terms in every calculation so that you can compare them consistantly.. but yes, you do have to anticipate closing costs, holding costs, and rehab costs as cash that you are putting into the deal most likely.

You can invest in a good or bad two family in RI or Mass equally, but having a a 20 minute vs. 1 hour daily commute, or being able to see family multiple times a week vs once or twice a month can be pretty important.So I would say choose between those areas first, then when you're ready to start analyzing specific properties to see if you want to put offers in on any of them, there are a lot of resources here on Bigger Pockets for learning to analyze properties, such as the rental property buy and hold calculator.I don't do a lot of owner occupied purchases for myself at this point so the Conventional 97 is new to me also (and has only been around since Dec 2014) but it looks like there are many pages comparing it to FHA so I'd recommend just spending the time to research the differences a bit.You'd want to make sure that if you use a mortgage broker s/he is licensed in RI and Mass (if you still haven't decided between the two), and I'd say to make sure when you are comparing the two options that you consider all the monthly costs (e.g., including private mortgage insurance payments in addition to the regular monthly principal/interest payment) and that you consider all the up-front costs.

A few additional pros and cons of an FHA loan is that the appraiser has stricter guidelines, one of them being that they have to point out any health and safety hazard that are present and require them to be fixed prior to closing, which translates to potentially a riskier transaction for the seller.