Some or ALL of these needed ingredients aren't in place.   

Mainly, because structural issues can be a complete black hole of money, time, effort--and it can be very difficult (and costly) to anticipate just how much money, time, and effort they'll consume.First, you'll need to figure out what's causing the structural issues--it could be settlement at the footers caused by ground water, it could be wood rot or termites in a beam, it could be masonry degradation caused by water coming off the roof, it could be improper drainage of the roof, it could be tree roots degrading the foundation, it could be a plumber who cut out a critical joist to install a line 20 years ago, it could be improper construction, it could be any or all of those things, and it could be any number of other potential causes.

But, you'll also have other problems... most or all heavily regulate short term rentals... so if you can't cash flow with a long-term rental strategy, you'll be in trouble once regulators catch up with you. 

If you live in one unit and rent out the other, you can cover some or all of your mortgage and expenses with rental income.

Broadly speaking, there are two types; offsite (like SFR, small apartments, etc) and onsite (large apartments with leasing offices on the property).For offsite, I usually see 8-10% of collected rents, half or all of late fees and 1/2 to all of the first month's rent. 

And as @Jay Hinrichs says, the market needs to be right for this strategy and you need a little "jingle in your pocket" ;) Most the time you are bringing a seller current on payments, providing moving expenses, and tackling deferred maintenance/updates - or all three on sub to.

Since he is on an oral lease, just give him 30 or 60 days notice (depending on state) that his lease is not being renewed.

Wouldn't it be better to serve some kind of notice since oral notices aren't legal?

There is no reason you have to have it all done by this vendor or all done at once. 

Examples of short and long term uses, HELOCs & CES.HELOC(Short Term)- Use a portion or all of the HELOC now knowing you're going to pay down quickly, which eliminates payments and interest.HELOC(Long Term)- Many HELOCs have 10 year interest only draw periods, while CES have a P&I payment, HELOCs may have less impact on cashflow over the long term.- Perhaps you think rates are going to move lower.