Buying in an area with a detached accessory dwelling unit (DADU) is another.  

I'd definitely prioritize your financial goals from whether you are really looking for another stream of income or if you're ok playing the appreciation game in an A class market. 

We are not looking at buying revenue streams, because most houses would cash flow well with a 50% down payment.

I am looking for real estate investment to be a stream of passive income, a career and a legacy. 

My streams of income are such, that I can scale fairly readily into MF assets.I never would have gotten to this point if my monies were locked up in a 401K. 

@Lola Brown yes, technically in a lot of towns it is a code violation to have more than 3 unrelated persons in the same dwelling structure.

Purchase price is 73500 and the dwelling coverage quoted was 129600 (although ARV most likely 90-100k).

I am actually currently in the process of obtaining a variance to convert my own property which is in a RSA-5 district into a two family dwelling. to start: the current zoning board is very developer friendly, so you have that on your side. the other factor that you have on your side is a genuine hardship.

Most Insurance companies will not write a Homeowners policy for a rented Dwelling.

According to the stony brook site:“A rental dwelling unit is considered legal when it has been inspected by the Chief Building Inspector or a designated employed by the town, and meets all applicable housing, sanitary, building, electrical and fire codes, rules, and regulations.