I believe you are correct.

I'd estimate your cash flow after you pay the loan payment would be $600-$800, which a lender that understands investment real estate should give you some credit for on your DTI.As for a bank, I have a specific lender at NBI that I would recommend.That 600-800 you are factoring in the HELOC repayment each month too, correct?  

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.

If I'm correct in my analysis, then I'd guess I'm also looking for a mentor if anyone is willing!

I was recently corrected as I thought 12 states required license but it’s up to 18 states now from what one of the BP experts let me know.Department of real estate for re brokernot sure on the cfl.

Be careful following the advice of strangers on the information superhighway.My apologies, you are correct on Familial status meaning pregnancy/children, I was indeed thinking more of marital status.

Am I even correct in my basic analysis of the market?

The problem is you can't afford to properly make repairs when you are dealing with the lower tier properties and go with the cheapest bids doing nothing but putting duct tape on issues that will become recurring or believing you are making the repairs correctly but use inferior labor and materials because its all the property can absorb cost wise.  

STR is a slowly dying model that exploded in the last 10 years and correcting big time.

Asking in the correct forum will get a better response.Read the RULES!