I ended up hiring an architect for floor plans and to deal with the city.

I dont see the floor plan but maybe if you turned a bedroom into 2 bathrooms and connected them to the adjacent units that could work very well.

We just discovered a crack in the concrete slab foundation that is a borderline major problem:- It is a vertical crack about 1/8 inch wide that is at least 9ft long, which is causing a 3/4 inch drop in the flooring and some evidence of old (luckily) limited moisture and termite intrusion. - BUT, it also appears old and probably a symptom of the original house settling.

That ends up leaving a void that's filled by unprofessional, and in some cases outright criminal operations there in the PM space.

Don't see any major red flags here, so long as you are comfortable in the low income space.

If you flip your flooring upgrades and appliances will probably need to be of higher quality vs a rental.

I agree we are quite active in the space. 

generally speaking, a developer should build what's on their floor plans and even more so what's in their contracts.

Buy a house that needs cosmetic work, kitchen, bath, flooring, paint, lights etc and fix it up yourself while living in it for a year.

A cabin that in theory would have cash flowed positive almost $1K/month had the kitchen drain go through the crawl space and dump out about 4' away from the house.