I guess for me, buying a home that already had hard numbers showing a $40k income is what would be needed for me to confidently proceed....

Doing this will allow you to proceed in tandem with big investors or city development projects.

You may need to evict, but some places allow simpler and faster proceedings if the tenant dies.

Basically, the mother in law is not represented in the "3/2" designation, so we're hoping there's some additional value hidden there.We are unsure what is the best way to proceed with a REI strategy with starting with this home.

Sell the asset and use the proceeds to buy a new residence in the desired district.

One of my business partners who sold his garbage and recycle business to waste management in 99 for 65million .. he LOVED to set up people in this conversation.WE would be at a club event or a dinner party or wine deal at one of the local Napa wineries ( we were both members of the same CC) and I can hear it coming.. someone who does not know him and was usually a stock broker would start up the what are you investing in conversation.. and Bill that's his name.. would say I have double tax free muni's  and of course the borker would say UGH those only return 3 to 4% you can do much better your cash flow is very low.. he would say.. well it depends on how many of those bonds you have.. and then proceed to tell him he had about 40 mil in those bonds.. so making a nice 100 to 150k a month double tax free kept him in beans and rice. not to mention the 40 acre vineyard estate he owns in Napa that he bought from the president of firemans fund insurance ( awesome house) and his lake front house at Tahoe his two or three trophy ranchs for hunting.. etc etc.. 

But I feel I've got a good plan on how to proceed.

Keep your nice low current rates, cover all closing costs out of loan proceeds etc.

Such a great way to use "all" of your sales proceeds.

In any event, what do you feel is your personal best case in seeing a project proceed?