You could also install GFCI circuit breakers at the panel.

Hi Roman,It actually looks very nice and well kept.If it were mine, I'd go with what the insurance company says, and if the electrical seems to be overloaded maybe pay an  electrician to come out and look at it, and bill the service charge to the residents (if it's overloaded you (they pay) may want to require them to have more breakers put in for the garage or something).All in all it seems like a nice garden setup.Tennessee isn't San Francisco...Good Luck!

I know I will need to understand the specific regulations in my area as well, but I don't think this would be the deal-breaker. 

Investment Info:

Single-family residence buy & hold investment in Newport News.

Purchase price: $56,350

Cash invested: $21,950

This is a buy and hold that we are currently working on. More to fol...

Is this a deal breaker for most of you all investors?

I want to rebuild it, because I'm confident I can prove to them, in circuit court, and through the appeals process, that it is a legal secondary dwelling which now makes this property a duplex.

Can I take the garage circuit off unit ones panel, put it in a sub panel and use a utility transfer switch to pick which service panel should feed it power? 

When you break them down, they equate to more costly and longer evictions, and some restrictions on rent increases.I would say none of these are complete deal breakers for investors but there is. % increase in the above costs that has to be accounted for.

The K&T was a little hidden (all outlets grounded, updated circuit breaker box & attic had some new wiring) and only after the purchase did we realize it is sliced throughout.

My next steps: Add a second electrical circuit breaker to the duplex to accommodate baseboard heaters so i can split the heat utility in my duplex.