Many STR (short term rental) sites, such as Airbnb, will allow a "cleaning fee" to be added to the cost, which you can use to offset your expenses without raising your publicised rate.As far as regulation goes, it is always a primary concern of mine when looking at STR opportunities...

If tenants are in you may be caught in a bad situation if they were not well vetted.I know Phillipsburg is near you and sort of "popped" into my head in your descp.Many of NJ multi families in that area were grandfathered in to local regulations and for that reason tend to be old, and the older in general tend to require more rehabilitation.Good luck!

FTC is also more 'regulated' than other Northern Colorado communities, i.e., max. number of occupants, certain properties may also have rent control.    

Add to that the new Dodd-Frank regulations that put constraints on the owner finance part of the wrap. 

If you and your investor are looking for infill areas that have already been developed you can look in the cities CAFR, Comprehensive Annual Financial Report, this has mostly info about the balance sheet for the local government, has a summary section in the beginning that talks alot about the major developments in the city.

From  what I understand this is regulated by FEMA, does anyone know how to get a lower rate?  

I also have to live at this residence for a year I believe under FHA regulations. 

It was  like waking up from a hospital nightmare and i have dealt with many houses that has been condemn by the government.

It's not a legal/regulation question, yes of course you can.  

New rules and regulations in NJ have made it difficult for lenders to close in 30 days.