I have been successfully renting out 3 rooms in my single family home while living in the unfinished basement for a little over two years now.

Congratulations @Megha Agarwal we have 2 STR’s in Lake Harmony as well and live about 2hr’s away.  

I live in one and rent the other for $400 cash flow.

I did not make them aware but included it with all my other documents and would have thought that seeing I had rental income and mortgage expense that they would have noticed or questioned what the cost segregation study was. 

Finding someone that is trustworthy that will do all of that while you are living out of area, and providing money and the lot has value.

Heating oil is expensive and I only expect a 3 year period before I see a significant return on my outlay.

If I can borrow money at 6% and invest money to make 20% plus I would do that all day long.2) Without leverage you are setting yourself up for paying more taxes because your depreciation expense cannot fully offset the cashflow. 

Since I live here and am within 15-20 minutes to all my properties I chose to self-manage.

If you're going to do Ellis Act, then you don't have to buy out either (but you will owe them certain moving expenses and time to move).

They have a whole department that investigated "occupancy fraud", which is a felony.The rules state that you must live there for at least 1 year.