Condo's usually have high HOA dues which will eat into your cash flow.

In terms of the illegal 1 bed cottage... so this isn't uncommon in my neck of the woods (NYC) in terms of something similar (basement apartments, garage apartments, etc.) 

Inflation itself in the midwest territories will rise over time at a conservative 3% regardless.

If you have a high level of faith in the company you are working with, then time will do what it is supposed to do and increase your IRR.  

Even if you can find insurance now, premiums will likely remain high, and resale value could be impacted unless the wiring is updated.

Quote from @Julia Lyrberg: Hi Robert,Instead of investing in expensive coaching programs, I’d highly recommend diving into some well-regarded real estate investment books.

The key difference, though, was he spent months carefully getting to know the local architecs, reputable builders, and even a couple of niche design firms that specialize in modern builds for mid- to high-end buyers.

Let’s say your filed of expertise is purchasing c type apartment t complexes and upgrading them to b, then holding to stabilization and once stabilized offering for sale.  

Your second property is either a highly leveraged property to round out. your 1031. 

Some of the national data sites have pricing suggestions that run both high and low.