I'm a dry sponge trying to soak up all the knowledge.

I don't think you are going to be able to get insurance for two separate living units in a single-family when they are both illegal and likely do not have the correct egress windows (basement) for fire safety which could subject you to huge liability if something happens to either party.

Try not to get overwhelmed as there’s a lot of information on BP and many avenues within real estate investing.When I was starting out, I was interested in so many strategies, but I discovered that I did my best when I focused on one or two and really built my knowledge around them.

Instant equity creates a margin of safety.

Without a firm base and working familiarity with these three areas the investor will not have the knowledge to analyze, negotiate and close advantageous real estate transactions. 2- Experience - the first few deals are likely to be smaller, harder, with more “surprises” and not as profitable as the investor imagined.

-Structural (foundation, wall, ceiling and floor)-Roof and Exterior(Roof Condition,Gutters and Downspouts, Siding, Windows and Doors)-Plumbing (Water Pressure,Leaks, Drainage, Pipes)-Electrical (Wiring,Outlets and Switches,Breaker Panel, Lighting Fixtures)-HVAC(Air Ducts, heating and cooling)-Water and Moisture Issues(Attic, Mold and Mildew)-Kitchen and Appliances-Bathrooms-Pest and Insect Problems-Safety Features

I would talk first to an electrician as many do fire alarm and life safety.

Those that cannot weather the storm get wiped out.Having cashflow positive properties provides a margin of safety you just do not have with negative cashflow.Why are you focused on buying in your backyard? 

Take it with a grain of salt as safety is subjective.You could also ask your Realtor and property manager their thoughts and maybe next time they are in the area to take photos.

Deals like this are absolutely achievable with the right knowledge and approach.Imagine what could be possible for YOU in 2025.