You should also consider "shotgun" layouts vs. true 1-bedrooms as there can be a big difference in demand and price for the less functional shotgun units. 

(I would guess the studios are the illegal units given the layout of the property.) 

Possibility is that we get a repair and replace permit, but I would need to find someone who knows the original layout as a multi-unit and put it back as it was (not sure if this is an architect, engineer, etc.)We keep it as a SFR and use cash for reno but will there be issues when we sell an illegally converted home?

Kitchen needs to be redone with new appliances and probably a new layout, carpets need to be replaced, walls need to be stripped of wall paper and painted. 

I would contact the appraiser and aside from voicing your argument I would send him three better, more suitable comps that illustrate three properties in areas as nice as yours that have a garage, etc and layout similar to what you have.

You would also layout whether each of you would require the consent of the other to sell your share to a third party {or whether that would be permitted at all}; whether each party has first rights if the other decided to sell; and the terms under which one "partner" could sell to the other.  

Hi my bp family .I'm getting ready to start in the real estate world ,I'm going to lay out my plans with you guys an hopefully get some positive feedback .i own a home that's free an clear an getting ready to finish my basement an have it rent out with plans in pulling out a equity or heloc an have the proceeds from the basement unit to cover the expenses which I plan then too invest a portion from the equity on a multi family also I forgot to mention the basement unit will be legit as far as the plan goes I plan to rinse an repeat this method any suggestions,or am I  missing something your thoughts will be gladly appreciated 

The upstairs is rented for 250 per month (I think it's a fair price based on condition, layout, and size) and I'm considering making covered stairs but that will cost a few grand and take some time to recover. 

Everything else...not so much.For reference, my last reno of ~1200 sf cost $25k in materials alone, using low-priced products from Lowes.I'm also confused on the layout of the property. 

I did like the old layout of member search because I could see more results quickly without scrolling.