Some people don't go thinking it's an entrance fee.

If you are buying for a long-term investment, you will do very well.Can the home you are interested in buying be split into a main home and an in-law/studio with a separate entrance?  

I'm on the lookout to buy a SFH in this crazy market and I'm looking to buy a split level home that can be converted into an attached ADU (upper and lower level living) with its own entrance. 

You might be able to make single family fly with a seperate entrance. 

Something like " the below grade area has its own entrance and is finished as a third unit with four rooms and is reportedly rented as a separate unit" it is beyond the scope of this analysis to determine if this is a legally permissible separate unit however county assessment records do not mention it, so I have assumed that it is not legal and given no contributory value" or with the ending " If found to be legal, the space would contribute $xx,xxx to the subjects market value." 

The additional parking, separate entrance, and finished basement would allow us to rent out the space without sharing our living area with the lessee (If we ever needed/desired to rent out that basement in the future).What would a seasoned real estate investor do in this situation?

I'm a local agent here that specializes in house hacking, and it is an amazing strategy that will help you accomplish your financial independence much faster than just pursuing index fund investing.Since you are looking for single family property , have you thought about finding house with ADU, house with separate entrance, house with mother-in-law apartment?  

The homes I'm interested in would have a finished basement (1 bedroom + living space) with a full bath and separate entrance, but we'd be sharing the kitchen.

Entrance to unit opens into 1 living area, bedroom to the left and small kitchen to the right and a bath attached to the right of that.

I locked the door to the basement and rented the 1st Floor as a separate apartment, then stayed in the basement myself with a separate bathroom and entrance.