The other post pretty much stated, do not get a place if it does not cash flow.Here's a hypethetical scenario..I can get a cash out refi on my primary residence for around $120k in my pocket (330 total, pay off house at 210 left on mortgage) that would change my mortgage from $1000/month to $1900/month.

Yes it is legal to rent a house you don't live in, to an extent as there is a 270 day occupancy requirement for a permanent resident; which really means that you can only rent it as a "whole house" for 95 days out of the year (I may have those days flip flopped, it may be 275 and 90).

But I don't know what would be a better option with the money.Option 1: Build a Garage with a 2BR apartment on my primary residence property.

It is all about risk tolerance as well as your other reserves. 

I currently do not own a home and rent myself so I see the benefits of locally purchasing a multifamily unit to use as my primary residence and REI.

Plus I don't have the down payment plus reserves I rather start out with somthing half as expensive but with the same 2% rule.I have some money I'm really just trying to figure out more before I do a deal.

Have SOME reserves at least

Or maybe these properties are reserved for certain buyers even if they are on the market. 

You can definitely find a nice SFR (Single Family Residence). 

I have my hands full trying to get the neighborhood network established, but with so many long-time residents sharing the same concerns, I know it will be ideal.