It's your first deal, you don't have a contracting network, you don't have an architect, you've likely never go through a permitting process, if 4-plexes are impossible to find it might have to do with restrictive zoning, etc.  

It's a pretty big deal to change these, generally requiring not only the quorum of homeowners, but also specific notice requirements, a certain time period for discussion, etc.The Covenants, Conditions and Restrictions (CC&Rs) also usually require a quorum of homeowners to change.  

Well, I guess I'm the odd one out. 

I have checked the lender's website and it says: Due to insurance restrictions and issues with construction work around tenants, EDC will not fund properties that are occupied at the time of purchase.Is this the case with all hard money lenders or just this one?

If you look for investments that aren’t you, that go against how you want your money to be working, it’s going to put you at odds with your goals.

I like having cash flow going day 1 but the due diligence is needed to increase the odds that it will still be flowing on day 2.  

Alec Partin I cannot say specifically how they operate, because they are a bit of an odd entity, but to ensure you don't lose the home, you may want to just sign the contract as is.

that seems odd to me but like I said I am new to this.

We have watering restrictions here.If it's not in the lease then you can't make the tenant spend the extra money on the water bill.  

I would consider expanding the location of where you want to live/invest to increase your odds of getting a good property.