Rent in my area is usually around a $1/ per sq/ft.The idea of very low maintenance and a home warranty is appealing to me.

Nothing wrong with it, but there is no appeal to the area that is comparable to the city of Denver. 

Both options work, but cheap and simple to start may be appealing.

I was wondering how much you guys believe it would effect the rental value/appeal if I was to live in the basement and keep the connecting door locked (or even removed if that won't raise zoning problems) and just use a door to the backyard/side of the house to enter/exit daily. 

The previous owners had law students in it, so it's not out of question for students, but could very easily appeal to a family.Here's the deal with Lubbock - it aint that big ;) (pardon the colloquialism).  

Property cash flows about $700/mo after the mortgage and expenses.The property does need some work to attract better tenants in the future and to make the property look more appealing.

Curb appeal is important to attract decent tenants and be a good neighbor.There's probably more I could say but I'm in a rush.

Curb Appeal It’s not enough to fix up the inside of the house.

May be he is looking to sell quickly for whatever reason and 100k cash looks appealing to him than waiting for 30-45 days for commercial loan to close with no guarantee.

Things that are aesthetic specific, almost always I would buy myself, but the labor is pretty cut and dry on these.