As long as the rent still covers the payments you should be able to leverage the money to either buy an additional rental unit (using that units future rent to help qualify) OR use it as a down payment for either an equity partner or hard money lender for a fix and flip in your area. 

One additional factor that helped me in the early stages of REI was having the advice of a trusted real estate agent.

They then hit you with an additional $1.25% if you work there too. 

I didn't think much of this until the inspector told me that he had seen people turn attics similar to this into additional brs + bath.

In addition, how would refinancing a few years down the road change the equation/outcome?

In addition, put in your contract that $5k-$10k will be kept in escrow until they move out, with the stipulation that if you are forced to evict them, the escrow can be used for eviction costs.

I am finishing my basement and need additional outlets, fixtures and se grounding.

-  in addition to the two options you listed, I would likely also be considering an FHA owner / occupied multifamily, as this could be a great cash flow generator down the line. 

@Peyton Leal My first comment will be Education. start there. in addition to that look at your financial situation to determine where you want and Can go..?

(and that's not including additional profit).If I am analyzing correctly, the ARV should be around $750k.