I don't think you are going to be able to get insurance for two separate living units in a single-family when they are both illegal and likely do not have the correct egress windows (basement) for fire safety which could subject you to huge liability if something happens to either party.

Looking to have access to more capital to help do more deals this year and want to make sure i'm not breaking any laws and get into trouble.  

There are bills going through now and we are pushing law makers to support, back, and pass these laws.

Clear office, Sheriff’s office, and law firm associated literally didn’t provide any information. 

Fort Collins did it since the 1960s and only recently created a law against it because of rent rates.

You didn't mention what kind of law you're practicing. 

Withoutknowing the details I can not suggest which would be right to add on.Several you should pay attention to are:- Ordinance & Law: Provides additional building coverage to deal with rebuilding costIncreases due to changes in Zoning or Building laws- Personal Injury Liability: Libel, defamation of character, wrongful imprisonment, etc.

I'm looking for advice on whether I should purchase my father-in-law's 6 unit apartment in Burien, WA (10 minutes south of Seattle) as my first deal, or perhaps help find him a seller that would pay more than I could and is a couple years ahead of me in REI. 

Law websites like nolo and others have said if the tenant in NJ has made partial payments then you have to give them 30-day notice before you begin the eviction process.

You state that you have 20% - 25% equity position for safety, but you don't based on the information you gave.