Later on in your investing journey the safety and low management of expensive, appreciating properties will become appealing.

-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

Instant equity creates a margin of safety.

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.

Than learn with that safety net until your ready to take things back over to self-manage again. 

The flyer you linked is about food safety rules by the Department of Agriculture and states they only allow true service animals in food establishments.

You state that you have 20% - 25% equity position for safety, but you don't based on the information you gave. 

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

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.

I am currently carrying hazard insurance.