Just barely scrapping by to keep the loan current the best they possibly can.They owe $141k on the first mortgage.

@Angelica Valde let's assume for a moment that the loan won't care if you re-zone it after closing (which is the most likely scenario)...how would you qualify for the loan when you refinanced?  

You could purchase a 4 plex with an FHA loan and live in one unit (house hack). 

Conventional loan How did you add value to the deal?

Building positive relationships with tenants can increase their retention and reduce turnover, promoting consistent rental income.Consider FHA loans with lower down payment requirements if you're starting with limited capital.

I haven't decided yet, I've been looking into the Chicago and Milwaukee markets recently, I don't have too much capital yet and no steady job, so I won't be able to obtain a loan right now, so I'm just kind of researching currently.

IMO the key metric is the DCR. talk to a commercial lender and find out how much they would lend on the property with a convetional loan and then factor in the 25% down and thats your number. i think most banks want 1.2-1.25 in order to lend based on the financials. 

However, based on the loans they are telling people to get and the course time frame - that is heavily implied as doable. 

A conventional loan How did you add value to the deal?

I would say go the owner occupant loan route to get into something for 3.5-5% down instead of 20-25% that you'd need with an investor loan, but those require you to live in the property for a year before you could rent it out.Airbnb could be appealing also since you'd already be furnishing the place for yourself, could just leave the furniture there after you'd move out.