Ideally you did not remove the finance contingency and the lender appraisal will prevent you from significantly over paying for the property. 

I've been told this is because Raleigh had zoning laws in the past that prevented building duplexes, but I would definitely need to research that more.

The down side of purchasing our PR in this area is the mortgage payments would be quite high, preventing us from saving anything toward a future investment. 

A clogged toilet that's caused by constantly flushing down wipes?

But since this wasn’t the initial plan, I already placed the home in an LLC about a year ago, will that prevent this rule from being valid?

Then you can collect monthly checks and not deal with clogged toilets.

Set aside the full 25k for cash reserves, pay off some debt, perform preventative maintenance (furnaces, etc) or buy next property?

- The street parking is one con, but shouldn't prevent you from getting bookings.

In addition a jurisdiction can prevent the ADU and JADU from being used for STR.  

If you don't, you are kind of complicit in the all the crimes he may have committed since and in the future against others you don't even know about yet, which you could have helped prevent.