I would live there for 3-5 years, save money for another down-payment, and then try to move out to a larger condo in the city (if city living is for you) or to a house in Bergen County NJ or Westchester (especially if you are thinking kids). 

Don't kid yourself into believing you have the ability to change how these people live.

An odd indicator is the large family furniture heirlooms folks my age can’t give away to their kids like past generations. 

Cause... life... extremely demanding jobs... kids.... you name the excuse we have it! 

I have 2 kids under 2, 2 60lb dogs, and a wife that doesn't see the glamour of living in a smf.

No kids not wife.

What resources you have used/know that may be suitable for young kids?

We are currently living in the house so we either need to find a new place to live or buy this one and move in two years so that we are closer to the school that my kids will be attending then.The current numbers only give a ROI of around 6%, but I am wondering if the fact that I want to live in it for 2 years makes it worth doing?

I work this way because I'm the spouse with a flexible schedule, which also means I get to spend a lot more time taking care of the kids (no regrets, I love my kids and it is what it is).

Those who have seen and I don’t know of any good way to rearrange this unless we skip the tub and install a shower, but then I lose families with kids as potentials.