Banks decline people that are self-employed, not because their tax returns are too complicated, but because they take massive deductions (legal, I know) which reduces their adjusted gross income.Incidentally, banks turn down W2 borrowers that take massive deductions for business related expenses which also reduces their adjusted gross income.I would suggest you look on BP to find an investor friendly local lender that you can sit down and have a coffee with. 

There are plenty of legal, profitable investments to be made.

I did a quick research and it seems many people are doing it and there isn't anything wrong ethically or legally, so is there something wrong in subletting for profits that I'm missing?

We would then rent both units out.For Wisconsin landlords, is there any licensure that we would need in order to legally rent out a property we own?

We are analyzing a purchase near Vista and our partner on this effort looked up the following:1. https://www.airbnb.com/rooms/14292365: Small studio rental in same area; historic converted carriage / barn = $100/night with 14 nights booked so far in May = $1400 for month2. https://www.airbnb.com/rooms/9351161: 2bd/1ba guesthouse same area; non-historic and bland = ~$95/night with 24 nights booked so far in May = $2280 for month3. https://www.airbnb.com/rooms/17674810: 1bd/1ba same area; non-historic but well designed = ~$90/night with 19 nights booked so far in June = $1710 for monthYou probably would want to do more similar analysis on Vista before proceeding with the STR route. 

Retirement plans are designed for passive income like interest, dividends, royalties and rentals, but not for operating a business. 

That way, if you don't like your housemate very much, but they're doing everything legally right, you still have a way to end the lease and ask them to vacate without being committed to a one-year lease.The income from this rent might not cancel out your mortgage, but it'll minimize it nicely, helping you to accelerate your savings and paying down any bad debts even faster.

The house itself isn't all that great, it's 3 thousand square feet, but nowhere near as luxurious as the rest of the homes in this neighborhood in terms of design; and I'm getting this for $1,250,000. 

I don't know the building code in your market, but whenever I run into smaller MFR's, especially duplexes, that have only 1 meter I wonder if it was converted from an SFR at some point, how well that conversion was done, and if that conversion was legal with the city.

I'm looking for something easy to use/read on mobile, well designed & investor friendly.