Let's say someone gave you one million dollars to invest in cash-flowing rental properties today (Aug 2016), and you're only allowed to use the money to buy multis in one city. 

If you want the seller to finance part of it you will need a commercial loan that allows it.

The answer is no,plain and simple.If he wants to run a home based business so badly,he can buy his own house and use his own insurance and take his own chances with city code enforcement.This is a legal disaster waiting to happen if you allow it.Find better tenants if they threaten to move,you'll sleep easier at night.

I know some websites like beenverified, instantcheckmate are not allowed to be used for tenant screening.

@Robert Ombres, I convinced my HOA to allow Staffordshire Terriers, which are of course very close to pitbulls.

They won't allow you to circumvent the agreement and will tell you to contact the listing agency.

@Seth V. my 401k account with trowe price allowed me to request a hardship loan in the past.

Also refinancing to conventional will allow me to use another FHA loan again as you can only have 1 FHA loan at a time.

Also, Some friendly states/judges will not allow you to raise rents too exorbitantly. 

Which gives me this monthly allowance.