@Troy Leinster As I understand it, the ordinance is aimed at literally all listings with a possible carve out for owner occupants like yourself although I’m not sure if you have to live in the building as you plan to or in the unit itself as in room sharing.

If you're main goal is an STR I'd recommend not only manual analysis of comp properties in your desired location, but also using tools like airdna.co to help gauge expected occupancy & ADR.

This is also my first home purchase, so the FHA loans and other owner-occupancy options are on the table.

Hi, @Dwayne Jones.You're project sounds interesting.Are you building the houses for yourself as rentals or to sell to investors/owner occupants?

The plan was to get the contract and ask for 60 due dilligence and go talk to the people there to gauge their characters and if they will be or wont be willing to leave Agree with "get seller to deliver vacant" consensus.If that isn't possible, talk to a landlord/tenant attorney - if the house is being used for an unapproved use, and/or if the occupancy is over allowable limits, you might have an easier time in court.  

Might also make him eligible for HAMP or whichever program helps owner occupants refi even if value > loan balance (did a quick web search and HAMP does seem to apply to 2-units, not just sfh).Different tack, is either of the current tenants interested in buying the place?

I guess the owners changed the certificate of occupancy to a two family but never added separate meters as they occupy the large portion of the house (duplex) and factored utilities into the rent for tenant as there are so separate meters.Now in this situation has anyone installed separate meters for water/sewer, electric and heat.

One disadvantage I see is that it may limit my ability to sell the property to an owner occupant if I have a tenant in place so I can understand that aspect, if I am thinking about this correctly.

And try to owner occupant pathway too.And also check the date the lease was signed,  See if you can 1. 

These types of studio apartments are designed to have only one occupant, generally rent for $500-$700 per door, and are increasing in demand.