Wanted to get some thoughts from more seasoned small multifamily investors on a few items or any other suggestions:- Any specific pros/cons of any particular states in SE (TN, AL, GA, NC, SC) to consider?

I would not say it is a deal breaker but I would speak with the city/county as well as septic contractors to get an idea of the cost (in dollars and time) and use these items to negotiate/renegotiate with the seller.  

If you stop at the 10 to 20mm range (or less) you can rent/hire most of the luxury items you  ever want, with no commitment, travel the world (if that's your thing).

The main issue is that to do the ADU you have to spend so much bringing other items up to code like electrical, plumbing, lighting (windows) and egress.

$540 is not unreasonable for a home of that size and the items you mention.

Tenant had some risk items such as extension cord going from outside to inside which invited an inspection.

I use this type of system in a ten unit that I own because the cost to submeter each one was cost prohibitive I usually don’t include other items like wifi/internet unless it’s a furnished/short term rental. 

My advice would be to underwrite as many house hack opportunities as possible and assume 100% vacancy + a large capex item so you stress test your worst possible scenario and can you get through this.

@Blaise Bevilacqua - I agree with the added expense items that others have called out including vacancy, repairs/maintenance, capex, unit turns, and low insurance.

Mine may be different though because I am still responsible for HVAC and many other large items on the property.