Please reach out and inform me on where I can find meetups or if you are open to having a conversation with me that would be great as well.

If you haven’t had the conversation with your relative about getting those “unofficial” tenants out, I believe you should do that soon and present your plan how it will be beneficial for both of you and you can begin the process of getting new tenants in. 

After an in depth conversation with my insurance agent, I decided not to add them on as I was made aware by my agent that would add additional liability to my policy. 

Have a business conversation with a tenant, send them an email summary of the conversation and ask them to confirm you got it correct.

I would be more than happy to make myself available for a conversation to get some more details and understand the whole scenario. 

Conversely, are there any areas I should avoid due to high crime rates, low rental demand, or other issues?

Here are some recommendations for you:Find and connect with other BP members that are in your area: http://www.biggerpockets.com/meetIf you wish to tag someone in the conversation on the forum, type @ followed by their name and then select the name of that person which should appear below the comments box.

Happy to have a conversation. 

Even if you could, you'd likely be looking at an older conversion property that will likely need consistent maintenance and wouldn't have the best appreciation.

What you're proposing is the conversion of ordinary income subject to SE taxes into deferred capital gain, OR potential exclusion of the income all-together under IRC Sec 121 if the property is to be your residence.I've seen no reasonable basis for such a position.