So for buy and hold, I get the saying if it is not broke, don’t fix it, but that does not hold true much of the time.You have to do a financial analysis of cost vs the increase in rental rates you could obtain and see where it comes out.

This requirement is pretty easy to obtain unless if you live in a higher priced area where rent to price ratios are not conducive like San Fran, seattle, NY, Orange county, LA, bay area CA, etc.Other than these two issues you'll be fine as long as you have qualifying credit, income, and "sourceable," down payment and closing funds.Thoughts or questions, let me know hope that helps.

It's possible as OP stated that the seller obtained an attorney that doesn't specialize in real estate and may be doing the job on the cheap rather than getting an attorney who specializes in the area and would be paid in line with their specialization.

Just to clarify, house-hacking involves occupying an investment property for at least a year, in order to obtain favorable loan terms and a low down payment.

They can help you put your best foot forward when trying to obtain financing from a lender.

For example, to qualify a tenant must:Have used their best efforts to obtain government assistance for housingAre unable to pay their full rent due to a substantial loss of incomeAre making their best efforts to make timely partial payments of rent, andWould become homeless or have to move into a shared living setting if they were to be evicted."

If you have an 810 credit score and drop to a 780, you are still in the top tier for obtaining the best interest rate on the Refi loan.Another way to reduce this credit score impact is to utilize velocity banking method.

@Steve Rubin I am looking for options to obtain. 

The bathroom is small, so is it possible to remove the toilet and sink until the proper certificates are obtained? 

The state and county (and, if applicable, the city) do require that you obtain a permit (it costs $15 and takes five minutes) and remit occupancy/hotel taxes.