(For example say a 4 bd/2 ba turned into a duplex each having 2 bd/1 ba)I am also wondering how distressed a property must be to qualify for a 203k... does the home have to first be considered to NOT be in livable condition, or can this loan be applied to a paint and carpet rehab?

Don’t waste precious time under contract and/or miss the chance to go under contract trying to find something you may not qualify for based on your experience.

I personally wouldn't over complicate your lending with commercial style loans (and guessing you wouldn't qualify unless you were doing some type of multi-family or portfolio project). 

We qualified for Keep Your Home, but lender wouldn't accept it.

He will be shortly leaving a high pay stable job (military pilot) for a low paying (40k/yr) job and it looks like this transition might be preventing him from qualifying for a cash out refi.

But many houses will not pass inspections or qualify for a loan due to condition, and many sellers do not have the cash to make the repairs. 

You can if the 5+ investors have an ongoing active role in the deal so that it qualifies as a JV.

I closed last December on another duplex that I'm using to qualify rent for income. 

You’ll need two years of a Qualifying income for the business, enough income to qualify for a loan..

Also if you're doing inbound; Facebook gets super pricey and the leads are not qualified.