That has become nearly an industry standard in the lending space. 

That will allow you to build the additional legal space further amplifying the value of the proprety (more HELOC money). 

The way the house is situated on it, I'm not sure we have enough space to build an ADU (BUT, still worth looking into!) 

She is from and still has family in Peoria, IL and her family owns a flooring business, and is well connected in the housing maintenance community in Greater Peoria.

For rentals, would a single floor or two floors makes sense? 

As mentioned before, stairs were broken, floors were moldy, etc. 

She immigrated from Serbia, so maybe that is a cultural difference, but my wife was pretty floored. 

(Previous rent was $1,300 but we're about to put in a brand new kitchen from the studs, new flooring throughout the house, new furance, adding A/C, etc).So do we just pay for it all upfront and mostly drain all of our savings, or do I let the rent pay for it and utilize our other savings to get a second property this spring/summer to increase our cashflow? 

There has been a substantial increase in inventory of storage facilities constructed and although generally near full occupancy there are greater options for storage space in most coastal regions.

Alamo REIA also hold events trying to connect individuals from different specialties within the real estate investing space.