You are entitled to one unit with the current zoning, and I would suggest going that route of just building oneIf you want to fight the uphill battle, I would suggest hiring an attorney to assist you in the rezone, speak to your councilman (they will want it changed to R6-A which will drastically change your site plan), door knock the neighborhood and get them to sign a document that they are in support of the rezone, etc.

Sure you have some people who aren't as good as they let on business-wise but can really talk the talk (that's half the people in the USA these days) but on the other hand there were also people involved who were great investors, whether buying and holding, flipping, buying tax lien certificates, etc and yet still went the seminar route as instructors because they simply enjoyed sharing their knowledge and the money could be damned good - some of the instructors were making serious money. 

May I ask which property management to stay away from just Incase I go that route?

I was looking into the NACA program, but after some more research, I don't think it's the best route for me.

If not we might just take the conventional route for the first property.

Have you tried owner occupying a place and doing the FHA 3.5% lowest downpayment, lower credit score route? 

I have been thinking about some FB ads but have not yet gone that route as I have no experience in that area. 

The rate on a cash out investment co-op is going to be very high, but that's likely going to be your only route in order to get cash out of that property other than liquidating the property. 

Thats a personal preference, I chose not to go that route but that doesnt mean you cant.

Be sure that you highlight that "selling your house can be easier than you think" with the advantages of working directly with you instead of the more traditional route.