But bottom line, I think you are on the right track.I think comments about characterizing this as a "misunderstanding" being a sleaze slumlord move is a bit dramatic. 

@Bill Glick the tax sale laws change dramatically from state to state and sometimes local jurisdiction to jurisdiction. 

I hope the site helps to boost you in the right direction that you need.

1) economic status is stable ... nothing too dramatic pending one way or the other 2) market in pierce county healthy ... more inventory than king ( Seattle )3) most of Tacoma’s suburbs seem much closer in proximity to the city as compared to Seattle ... there are a few areas that will be lower in price ( and not as desired ) 4) 

The problem with Thomaston is there's not a lot of industry to boost up the economy and it's not really that close to anywhere.Of course, depends on your goals, but there are certainly better options. 

Fix-and-flips happen in the commercial sector all the time and that dramatically changes the appraised value.

You do want to think of things from a tax standpoint, but you will also want to think about liability protection while establishing these entities, also.The Difference Between LLCs, C Corporations, and S CorporationsKnow Your Real Estate Partnerships: General and Limited Partnerships ExplainedIt can all shift pretty dramatically based on the details of your situation.

Is there any space that can be turned into a 3rd bedroom without to much trouble. a third bedroom can boost the rent significantly.

The timing and events of income are dramatically different for these two options. 

Plus you have gang territory issues in some areas where things are dramatically different from one block to the next.