As long as you buy at the right price, everything can go terribly wrong and you can still win. 

The house is not in terrible shape but needs some updating so I was wondering if it is alright to live in the one side and fix that side up and then when the other side becomes available (in 3 months) to move into it and fix that side up?

I have Fieldstone as an HOA company for one of my properties and they have been doing a terrible job. 

That point is coming at the end of October, so not terribly long.Folks above have mentioned the ability to fold in renovation costs (in addition to the cash purchase price of the pre-renovated home) as part of the basis for the loan, but I noticed that you don't, and that there isn't any mention of that (that I found, anyway) on the Fannie Mae page either.

The roof is in terrible shape, and it appears to need a lot more work than I thought it would.  

Assuming, this is the ONLY real estate investment you will ever make, you could very well go through 15 years with not a single terrible renter, and maybe a couple that simply struggle with making payments on time, and one that had to be evicted (wouldn't be that bad at all if that's all that happens in 15 years on a 4plex).SCREENING prevents tons of problems, and a huge sign of an inexperienced amateur landlord is one that has found themselves in a big pickle because they neglected to screen their potential tenants properly.That's about it.

Our landlord has terrible relations with it's contractors.

What a terrible CAP rate. 

It drives me nuts to pay so much money to a group that has terrible record keeping skills and seemly unlimited power to keep charging me.

In this case, the owner walked away, the home was foreclosed, and I bought it.In my case, after purchasing, the fees that had accumulated over 3 years were waived once I (A) submitted plans for a permit to resolve it and (B) did the work and (C) finalled all 3 permits I had to pull.Doing the work under a code compliance case was terrible and I'd prefer to never have to do that again, but that's the price of opportunity.No idea how your city works, but that was my experience.