My experience with first time buyers is that most are cash strapped, so the less out of pocket they need to move in to your home the more appealing it will be. 

City may have ordinances regarding that also so you could site that rule. but basically if it's done inside the garage on his own personal car I would be fine with it as long as he has taken care of oil waste and puts down protective mats, If his car dripped oil on the driveway.. would you have a fit or what ?..

I'd recommend you boot-strap the list though, if the water heaters for example are working and are in basic working condition then leave them alone...if the foundation isn't leaking then I wouldn't worry about it any further than a quick inspection to ensure there isn't movement or anything that will result in long-term damage.Appliance updates and carpeting I'd recommend you do when the units are vacant, if the unit is occupied and paying and happy (and the carpet is OK) then leave it.

Not everyone who owns an expensive piece of metal is strapped for cash or loaded.

I've seen a few porches demo'd and if you strap a good chain to one on a strong truck, you can usually pull the entire structure down without hurting the house (assuming you sliced the roof first). 

If your low paying restaurant tenant decides to shut down when you raise rent then you should be able to market the property for restaurant use as well as daycares, laundry mats or any other zoning that is allowable.  

However, we're wondering how much underwriting we should have, and also how much money we should be investing from our paychecks (we both still have day jobs) to strap the business with more cash and to invest more.Anybody have any advice as to what they do?

Probable second steps would be issue a formal 30-day notice to vacate and notice that you will not permit a second tenant, they have guest visitation rights but under no circumstances are they permitted to move in.Unfortunately, without a written lease of some kind, this situation has a lot of potential to get really ugly, really fast and your friend should strap in and mentally prepare herself for the worst, this is why renting to tenants without screening or a lease is so dangerous.By the way, I would go to a lawyer like, NOW.Two groups I know, Tran Law Group and Spectra Law, do not specialize in evictions, but should be able to refer your friend.

@Mat Deveaney I think in your state you need to go through an attorney.

Hello @Chris Mattingly.