I will make sure I can easily raise the loan amount within 30 days, so in cased this loan becomes troublesome (due to new regulations), then I will simply pay off the loan.  

Building a property would increase the likelihood the work is done the correct way and would have the most modern update amenities in order pass current regulations / laws, while also having the units look the way I envision them.What are the pros and cons to this approach?

And, if you live in the unit, you may not need to abide by certain laws and regulations for tenants.

At which point a lot of the rules and regulations probably become more involved.

This is based on temporary regulations, but you only need to meet 1 of the 7 tests - 500 hours is one, but there are 6 others that are likely much easier to meet.For all of this, you should have a call with a CPA/EA with strong experience in real estate, outline your circumstances in detail, and see where you fallAs far as what hours count... really any services provided that you would consider "work" in real estate, but of course there are exclusions for work you are doing specifically to hit the hours or "investor" activities such as reviewing financials.

@Cameron Riley this is definitely a frustrating position to be in as an investor, but I really don't recommend going that route:1) They are not trespassing2) Threats rarely get you the desired results and usually just incite the tenants to leave your property in especially poor condition when they do eventually move3) It's especially counterproductive to threaten a tenant with something that is factually inaccurate, such as calling a holdover tenancy "trespassing" and mistaking it for a police/criminal matter4) You should contact an experienced eviction attorney to understand your options and the likely timeline and cost of this process5) Some people will tell you to offer cash for keys, I generally think this is a poor option and rewards bad behavior6) I recommend checking out property management options in your area so that next time the matter can be handled effectively and efficiently within the parameters of the relevant law and regulations and without the emotional investment that leads to wanting to make threatsGood luck!

The quote you mentioned leads me to believe this is a non-owner occupied loan, because owner occupied loans can have no more than 3% origination and discount points in cost, otherwise its considered a High Cost Mortgage and is not allowed the safe harbor protections as per the regulations. 

Regulations, taxes, and a government that increasingly views Landlords as evil is a disaster waiting to happen.

Pulling from general Personal Finance wisdom and lending regulations, it is a good idea to have 6+ months of operating expenses in reserves. 

https://www.marketwatch.com/story/mortgage-regulator-to-loosen-refinance-restrictions-for-home-loans-in-forbearance-2020-05-19 This recently came out showing only 3 consecutive payments would be needed after forbearance ends to qualify for new credit.