The last factor, after doing due diligence is to do a gut check on your intuition. 

Check the LLC is legit and consult a tax advisor for tax details.

Make sure you triple check their coverage limits though, and ask me name is an additional insured. 

Right now, my only income in a weekly 300.00 unemployment check.

Some require an inspector to check the work each time, with me as the investor paying for those inspections each time.

Some title companies might assist in this process, but it's best to check directly with yours.

Check with your county tax assessor. 

Please check out this recently published article on BIggerPockets which addresses your exact question - BRRRR financing pros/cons of all the options (Cash / Hard Money / DSCR / refinance options)https://www.biggerpockets.com/blog/brrrr-loans-what-are-the-...

How can I check to see if the unit is illegal not?

NY isn't TN so you need to do your research and check the comps.If you acquire it, you'd have an option to flip it, develop it or live on it.