Additionally, if you are living in the property (basement studio), getting mail at the property, have the property on your driver's license, and are paying the mortgage, I would not be overly concerned about the legality of the basement unit.

If it's within my tolerance level for what I had budgeted for the renovation, say $10k, I'll bring a GC out to write up an SOW and use that as my driver for the offer.

If another driver accidentially rear-ended them and damaged their car, that driver would be responsible for the damage, right?

If you buy there, be ready for pitiful cash flow (if any) for the first several years of your investment as the primary driver for rent is saturated with luxury properties. 

Driver of crashed car opens the door and stumbles in, covered in blood and screaming at the top of his lungs, "THEY SHOT MY BABY!!!"

It's the second market we plan to expand our build to rent offering to / spec home after Columbus Ohio which has the same economic drivers but just much larger metro and more submarkets.

It puts you in the drivers seat. 

  :)   This puts you in the drivers seat.My favorite Attorney rant;  do you know how little it takes to become an Attorney?   

Like my driver told me unreliable  people that's in every business

One nice thing about selling a primary residence (after 2 years of living in it) is the tax free capital gains.I prefer to structure my investments to avoid forced sale - you want to be the one to decide when you sell based on market drivers not cash flow crisis.