Hi Otis,Self-Directed IRAs (SDIRAs) can be a great tool for funding real estate deals, especially for private money deals.

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.

Airdna is a good resource and tool, but I wouldn't rely solely on that platform for data.

My husband was able to consolidate and re-finance the debt after we executed the deal but this was only possible because we bought a VERY modest property of 70k as a learning tool to really see what buying a home in CR would be like. 

I'm in very similar position, looking to start my RE investing journey around Boston area and facing struggle to cash out on my stock portfolio to try to get a MF, that using BP analysis tools, will be barely break even...even in slightly farther surrounding areas. wishing us both luck though! 

It is a safety issue. 

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Use tools like AirDNA or Mashvisor to provide market data on projected rental income and occupancy rates, and make sure your lender works with appraisers familiar with short-term rentals.

Hotels are definitely not fans of STRs but it is regular people and safety officials that are pushing for these regulations. 

Tools like BiggerPockets Calculators and rent estimation tools are incredibly helpful.