I live in SoCal so if I wanted strong cash flow I would likely have to look out of state.

I'm assuming that this situation wouldn't pass inspection, but one could argue that all the spaces the guests have access to (i.e. bedroom, bathroom) are safe and habitable + the guests wouldn't be exposed to the kitchen.Also, do the city inspectors inspect other parts of the home the guests won't access (i.e. inspectors check the basement for water infiltration even though no guests would ever be living or even going down there). 

I live in a community where half the people never lock their doors.

We agents why they are getting their license NINTEY PERCENT of them are going to say to sell homes and make a living on commission!

She prefers they sell the house right now, as is, and live off their profit.

I lived in it for a year and loved the location.

I'm from Newburyport and lived in Seaport for a while.

It's vital to know which state you live, where all your properties are located, your homestead (if you have one), values and type of REI business you have now and what you want to have in 3-5-10 yrs to have the right set up for you. 

If you're a single mom with student loans, a car payment, and living paycheck-to-paycheck, then $20,000 would be devastating and a reserve is critical.

If a home was previusly owned and lived in by a famous person, does it add much value?