They'll let the existing ones stay but even then I've heard at least second hand that even then they'll sometimes use various reasons to shut down the separate unit even if its not sold or anything.

It's a short way of describing a purchase contract clause: "Purchase of real property is subject to the existing liens and encumbrances remaining in place."

Fundamentals of real estate are those aspects taught in state approved schools for those seeking a license, that type of education is non-existent here but there are comments in forums to that you may pick up,  if you recognize them.

Correct me if I am wrong, but I think if someone doesn't have a Solo 401K, one cannot just roll over an existing traditional IRA or 401K to it, right?

Doesn't a quit claim nullifies the existing title insurance and thus C would need to buy a new one to be protected? 

I was thinking the same thing, it should not be tough to connect anything along the same wall as the kitchen and I am not really clear on how the existing laundry area and the bathrooms are set up but maybe move the laundry to the "strange" room and then make an additional bathroom where the old one was.

@Will Johnston So if I did a conventional (which is sounding like the better option at this point), would I have to refinance to get the PMI removed, or could I just request an appraisal once I reach 80% LTV to have it removed but keep the existing financing in place?

(I wish BP existed 10 years ago!)

Find a distressed owner and offer to purchase the property Subject 2 their existing financing.  

Experience and knowledge will help mitigate those risks, but they always exist.