I never got around to it because of some roadblocks:1) I was told if I add a 2nd level, I would exceed 1-4 multifamily loan and would require a commercial loan.

You will find lenders out there who have different max leverage requirements 75-80% lt cash out depending on DSCR, seasoning, FICO, etc. 

I would be willing to set aside these requirements with limited exceptions if it's a really good deal that I would otherwise lose, but it would have to be a situation like an infill parcel in South Philadelphia where many of the other risks are not as likely to arise. 

This answer relates to Derek's in that different property types require different responses.

If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee.

Maybe consider revisiting your real estate investment purpose and confirm if it property aligns with your search criteria requirements. 

I am getting this message - "This product does not meet California air cleaner regulation requirements, and cannot be shipped to California".Does anyone else belongs to California provide any specific recommendation? 

(again from pub 523 - Unlike the ownership requirement, each spouse must meet the residence requirement individually for a married couple filing jointly to get the full exclusion.)

The reason has to do with a base line effect, a couple with a stable income that is required to qualify for a mortgage will usually make enough to qualify for a 200k house.

You’ll have some requirements to show future income, but it might be the easiest “next move.”I wish you all the best.