(Then we’d just start a commune, I guess.)The Setup: Living My Best (Small) LifeI bought a 2BD/1BA home with a private efficiency studio.

In option 2, your costs are $25k higher.

Once the city gives direction, then start to look at available options and penciling out the numbers to see what makes the most sense.  

You're wasting hours of your time driving and walking around stores looking for the right lights to fit in your project when you should be looking for more deals.2.

In the meantime, just focus on filing the vacany of the first property you bought and get familiar with what it's like to own a rental property first.  

Some/many lenders don't like a 2nd mortgage behind their first (like the skin in the game), however there are both bridge or permanent financing options out there allowing you to leverage anywhere from 90% CLTV - 100% CLTV, but don't expect good terms...

I have heard about doing deals with little to no cash down but I'm skeptical about whether creative financing options are truly viable.

We are planning to hold it for 5 years and bought a rate cap to cover the entire hold period. 

We have just bought a bunch of HD's brand Defiant.  

Quote from @Geoff McFarlane: We bought our current home in 2011 for $97k.