Medical care and insurance is heavily subsidized based on low income, not personal wealth. 

It's important you learn this, particularly in the most heavily regulated state in our union.You can read their advice for this situation here: https://www.nolo.com/legal-enc...It appears you have to give 60 days notice because they've lived there for more than a year.

Banks will normally heavily factor in your own personal credit history, and also make you be a personal guarantor for any loan.

I've done some research and learned that 2-4 units are more heavily valued on comps versus income. 

I completely understand if one does not to go Pro, but for me, it is weighted heavily as a time~money decision as well.

At least in this particular case, we are #1).Finally, paranoia is a thought process believed to be heavily influenced by anxiety or fear, often to the point of irrationality and delusion (Thanks wiki!).  

yeah, not a good situation, you did a lot of work without permits that any town could fine you heavily and make you open up everything and even dig out the footings to show you went deep enough. on top of that your area may not be zoned for 2 family and considered illegal and make you take the kitchen out. first step is to check your zoning and see if you can legally be zoned for a 2 family. and i did not see where you mentioned you have bedroom(s) down there, each bedroom must have an egress window( they must be the right size for egress and meet codes for height off the floor and exit to above ground), not just a window that opens and closes with a screen. since you have a walk out basement that meets emergency exit requirements, as long as the door is at least  3' wide. then you are at the mercy of the building department at that point, if they ignore or come after you.

I think I get the “analysis paralysis” that is talked about around here pretty heavily.

I live very close and my only advice is to do your research heavily on the area.

I was leaning heavily towards selling, but wanted to make sure I was making the right choice. :)  Thanks!