This would definitely make it worthwhile to sell, because I was all-in for Duplex C for $165K, can perhaps sell for $185K after closing costs, and that would put me at $20K profit (which will be taxed, short-term ordinary income bracket). 

I've talked to the current PM, and while he's usually leery about managing non-conforming properties, he said the fact that the postal service didn't raise a red flag and is delivering to all four units is good enough for him that there'll be no issues with the county. 

To me at least, that seems like a much better first filter than any "rule" If it passes that sniff test then you make an offer at your price and model to your hearts content.

Even the registration only has my name as well as the receipt and every single other paperwork they gave me at dealership. 

There’s obviously the possibility of not being a lot of meat on the bone especially from the aspect of wholesaling.

Might also consider not allowing parking where the red car is.

What may be a green light to you, may be red light to me and vice versa.

If they say no that is a giant red flag and I would simply leave at that point.

Most cash investors will take anything at the right price but big red flags would be major roads/ freeways, backing commercial or heavy duty power lines, and houses that are too small for the area, lately it seems popular to flip 3br 800-900 sqft houses which would be a pretty cramped home for most people, usually the buyers there are owner occupants. 

Could he still sell the house to me at this stage of the process?