If it was just pumped in November the ground should still show signs of being disturbed where they dug for the tank cover.

Also, if going the FHA route, the rental units must cover the mortgage (tough to do in SoCal these days).

Equity only means that you are free to negotiate price within range of your equity as the proceeds would at least cover your mortgage.

To start, the numbers:3 bedroom, 1.5 bath 1700 sq foot brick SFH with bonus room.Purchase Price: $59kAppraisal: $105k as is with estimated $124k after rehab.Renovation budget: $20k.Renovations include: new flooring in bonus room, kitchen and baths. total renovation of bathrooms, new cabinets, crown molding (to cover bad drywall job by previous owner), buff hard woods, paint exterior, paint interior, remove awning, remove side door and seal up, fix low spot in kitchen floor, and remove the non-permitted fire place.Estimated Rent: Initially I budgeted $950 per month based on another rental I own in a similar location, but  two houses on the same block were recently rented for $1200+.

All of the suburban areas around Milwaukee are growing, which covers the better part of about 9 counties.Milwaukee needs to take a few plays out of the Chicago playbook and to give Milwaukee credit, they are starting to do so. 

(especially the amount down and interest rate advantage of it being a personal residence)B) Could the current market rent for the home in South Pasadena cover them renting a better place while still cash flowing and allowing you to make better investments with the equity you could pull from the house?

Assuming you use financial wisdom and insure your income more than covers your leverage not using it is financially stunted.

Even IF you get Section 8 to pay their rent, Section 8 generally does not cover all their rent. 

I asked my Allstate agent about getting an umbrella policy and he said it wouldn't cover rental property.

Purchase price is about half a million and the lot has no setbacks, the building footprint can cover the entire lot up to the side walk.