The fact that you think the tenant is a pain has nothing to do with how you maintain the property, you could be creating legal and maintenance problems for yourself by not taking action. 

Quote from @Brandon Larson: Yea, @Nathan Gesner is that legal to enroll someone in an insurance policy and then charge them for it?

Purchase contract should show the entire legal as platted.

Quote from @Jeremy Jareckyj: Anything rented for longer than 30 days is legally considered a long-term rental.

Similar areas that have legal under utilized permitted space convert to max studios that you can fit.  

Do not rely on it for legal advice.

Ambulance chasing attorneys know their way around and can legally navigate around Insurance Policies.

If you buy it too low, in some jurisdictions they will call it "equity skimming" which is illegal.It can be very profitable, I've done many, but you really need to know what you are doing. on pre foreclosures on the West coast if you happen to do them legally .. the old owner is due 80% of the profit if you sell within 36 months.. so there is that.. but if your buying pre foreclosure for long term hold and wait out the 36 months then your fine. the reality these days is post GFC lenders/ banks/ servicers have realize that working with the buyer to reinstate recast redo the loans is far better than taking it all the way to foreclosure so your correct its usually the worse houses that make it all the way to the end and go to sale.thats why if you follow NODs  Notice of defaults or whatever they are call in your state. you see so many postponements and or removed or paid off etc.. so you hone in on one property do all this work only to have it not go  to sale  rarely are you going to buy a home that you really want LOL

Since our legal billed were $36,000, we’re $100,000 ahead.  

Last I checked they don't allow ADUs legally that aren't fixed, they want to see foundation for it to be rented out and considered an ADU.