Is this enough buffer to take the risk and make an investment considering the market adjusts and now said house is right back to market rates? 

It is important to stay alert and adjust to market conditions and take advantage of market opportunities!

Your wife's broker will likely dictate this in the brokerage policy manual. 

If I was to have a bunch of tenants just deposit slip money to my bank account or PayPal me I’d then have to spend a ton of time taking that payment data and recording it manually to everyone’s ledger. 

If you're using market maker, adjust the slider to occupancy and accept the changes in pricing. 

Just adjust to the conditions, but stay in the game w/ deals that work. 

Average Rent- $1,500 / monthIf I were to rent this to two people my income would be $3000 but since I'd be living in the other half, I would contribute roughly $500 / month (I am currently renting at $1,500 / month in Portland so I see this as gaining $1,000 / month on my end)But since I'm living it the property the numbers I'm seeing based off the general rules of thumb don't make sense.How should I adjust my analysis to take into account that I'm living there?

At the end of due diligence adjustments we proceed to a P&S with a 2nd deposit.While it's theoretically possible to close from the offer (without a P&S), it's just not done here.You should also get your contracts from an attorney instead of a REIA. 

There's space to build out another apartment as well as a potential office space in the basement with a zoning adjustment.

There's space to build out another apartment as well as a potential office space in the basement with a zoning adjustment.