That way, if you don't like your housemate very much, but they're doing everything legally right, you still have a way to end the lease and ask them to vacate without being committed to a one-year lease.The income from this rent might not cancel out your mortgage, but it'll minimize it nicely, helping you to accelerate your savings and paying down any bad debts even faster.

But I love living in the city where all my friends are so I was then restricted from there to my income, but I also wanted to stay in the area.

I don't know the building code in your market, but whenever I run into smaller MFR's, especially duplexes, that have only 1 meter I wonder if it was converted from an SFR at some point, how well that conversion was done, and if that conversion was legal with the city.

My lawyer is paid for through a pre paid legal plan through work and hence I do not have any such costs either.

He'll give the legal description and then the common description and then announce the opening bid.

The easiest way is to list it and sell it as-is and ASAP before the bank starts adding penalties and legal proceedings.

What is my legal/ethical obligation to first people that signed lease but no deposit yet. 

Be sure to learn all you can about zoning, wetlands, FEMA/flood lines, and any other restrictions.

Does each 25 year flood zone property have the same restrictions?

Many properties listed for sale can't be rented due to HOA restrictions.