Your mortgage lender is required to select them for you. 

Great feedback and it reinforces some of the other requirements I have been thinking about. 

@Andreu Ferragut - I am not familiar with the no income verification loan product, but I'd have to believe any bank product will require you to remove the illegal efficiency from the property.I'd still say talk with your realtor and real estate attorney - and your lender (local bank - not Wells Fargo or any institutional bank). 

From a lending perspective a commercial loan requires a higher down payment, thus I would like to combine two of the units into one unit to make it a 4 unit residential property.

We’re also seeing banks tighten credit requirements which is knocking out some buyers as well.

The county requires a minimum of two buildable acres.  

Try to require a copy of tenant Drivers Licenses as part of your renewal requirement.

To give you an idea, for new construction, we require a 680+ credit score and 2+ exits in the past 3 years, with a minimum loan amount of $100K. 

Currently, leaning towards medium or long term rentals, with minimal updates required to begin cash flowing ASAP.

You get better terms on a primary residence -- lower interest rate, lower down payment requirements -- because if you encounter financial strain, you're most likely to pay the mortgage on the roof over your head.