There is also potential to use the two lots together as a tiny house rental. 

It's just silly to not use one when they are so inexpensive....People trying to save $400 on a $400k purchase, cracks me up.......duh....

The house has foundation issue; cracks on the wall/brick and one side of living area is tilted down noticeably.

Job loss is a really rare one to be honest, this is such a tiny % segment of things, it's like foreclosure, but even less.

We have room on the property to add an additional 2 homes (pier beam) 2/1 tiny homes and rent for 1000-1200 each.

Very few if any realtors are going to be focusing on these types of deals because they make up a tiny percentage of the total market.

Any advice on being able to crack this last nut before making an offer?

However, some states are cracking down on that thanx to the CFPB.My $0.02 ...

Our townhouse was built as a 2 bed 2 bath with an unfinished basement (that is tiny, around 300sqft but divided into utility room, small walk in closet, and oddly long and narrow main room) and 2 car garage.

In commercial, and for OP (based on her past deals) $1.5 million is objectively small (tiny really).