Turn electricity on in your name and bill tenant for it or deduct from security deposit.

To add on to some of Pete's ideas, what I did with my venue was do conduct style shoots and allow different vendors in to decorate the venue and have models come to pose for photos as if they were getting married.

Waiting for equity build up and appreciation and then cash out refi to buy a few more homes is a possibility but that may take quite a while.Increases in value come from only two sources: passive market forces (appreciation), and; changes to the dwelling that you actively make that then allow market forces to affect the property differently than doing nothing would have done.You do not want to take active steps (rehabbing is an active step).

To further clarify:The RS-3 Zone allows for 1 and 2 unit residential buildings; and requires 2,500 sq.ft. of lot area per residential unit (with some exceptions).

For example,, if the house was worth $200k and the lender needed a 75% loan-to-value, they would only allow for $150k financing on the house. 

Biggest thing to keep in mind is a lot of programs and lenders do not allow for a property to be titled into an LLC.You can use a DSCR or Bank Portfolio loan those both allow for a an LLC to either close in an LLC or you can "Quit Claim" it after you close. 

Did you have difficulty finding properties that would allow you to arbitrage? 

I've calculated the tenant-occupied vs. owner-occupied ratio and understand that for expenses that are for shared areas, that ratio would be applied at tax time to deduct. 

Yes, you can use a DSCR loan not all lenders allow it but its done under a Non/QM program.

Most NON-QM lenders will allow for a 20% down payment for investors on 2-4 unit properties, as Conventional financing is 25% down for 2-4 unit properties.