In general the IRS does not allow married couples to deduct home mortgage interest on loan balances above $1,000,000 ($500,000 for single).  

They also have a free service called rentalizer, that allows you to enter any address and if they have info for it, they can guesstimate how much you may get as a AirBnB landlord.There are a lot more sources and blogs dedicated to this, so a search on google for "airbnb best markets" can give more details.Hope this helps!

Assuming you live in Sacramento, CA and your lease allows for it, I would be airBnb'ing the sh*t out of that apartment.

Account Closed rolling over your $75,000 in your 401(k) plan into a Self-Directed IRA would allow you to avoid the "dummy tax" and let you use the funds to purchase real estate.

In my town, we have what's effectively considered "allowed non-conforming properties" which are exactly like you discussed...multi-unit buildings in single family zones, etc because of grandfathering.

I don't know if this is allowed... but I just bought a 63k house in IL and used Busey Bank.

RT1 allows for up to 2-family properties.

This would allow you to defer the taxes on the sale whether you treat it as your personal residence or an investment property.

If you are trying to wholesale it, don't. 95% chance you'll just end up keeping their home off the market fit 60-90 days, so they can't sell to a real buyer, then the deals falls apart because you find a buyer, your double close doesn't work (no assignments allowed), etc, etc.

Next use the 70% rule to determine your allowable cost basis