However, I would like to discuss the macro approach to how these arrangements are structured.

When I read it I thought it said it applies to Owner Financing and there were a lot of regulations http://www.biggerpockets.com/blogs/3/blog_posts/39...I would rather not live in one of the units if I can arrange it that way I think for my situation it would be more beneficial that way.

I would square all that before selling it, which might mean contacting the owner and arranging for them to pick it up.

There are pros and cons to this arrangement. 

I also had a newborn while there, and a pre-schooler.

My local REIA has an oil heat arrangement where the landlords who sign up get some favorable terms; you might want to look into that in your area so the tenant doesn't feel like they have to shop around to save a buck.

For the secondary bedrooms, expect at least one to be a youth bedroom with multiple bed arrangements.

(You also would split the rent income reporting in the same way.)If you intend to continue investing together, you may want to consider arranging an LLC so that you have more flexibility. 

So for you and your market and product, schools may be a factor in where you buy.You see MY MARKET is either the young professional (no kids or one under 5yrs old), the struggling single parent or young couple with no kids, or no more than 2 that are usually pre-school age, or the more mature but scraping to get by just looking for affordable rent.

I can understand -- it may be a temporary arrangement until he finds another place, or she may not want to be tied into living together by lease if things fall through.