I'm a boston-based investor,  looking to buy a multi-family unit and plan to use my residence unit as a STR. 

Investment Info:Small multi-family (2-4 units) buy & hold investment.

My goal is to buy the house, terminate the section 8 lease as soon as possible (at the lease term, to avoid eviction process), and search myself for other better tenants.

It's difficult navigating the home purchase process in general, but a lot of more difficult buying something with costly surprises you didn't plan for. 

Buying at the right time in the POPs, when the neighborhoods are still rough, will give you outsized appreciation.

Buying into existing tenants can be very risky.

If you find a place where the numbers make sense, buy it.  

When buying a note at a discount (e.g. $100k performing I/O note for $90k), how do you classify the extra principal you get back when the loan matures?

In Reno, NV we have newbuilds that're called "Next Gen" that have a separate in-law suite (w/ out a stove to adhere to SF zoning). 

If you read what I said, I apologized if I assumed you weren't a HML and you were.My answer is still the same, there's nothing in the deal but problems for the buying from year 3 and beyond....and if you think I was lecturing you, you have a very thin skin.