The bigger obstacle for me is the loss of health insurance.  

The second detached structure is 720 square feet on separate meters.  

I understand their point of view from a liability perspective, but I'm curious to know if others have faced this obstacle as it could drive the insurance cost up higher than forecast in your analysis.

What's your biggest obstacle?

Otherwise you have to attach the units, which isn't bad, but I always try to detach the units.

The seller had owned it since 1949. 4 Units 1BR/1 bath each (these are true 1BR units, not walk-through or "shotgun" style)3 units currently rented at $525, $525, and $550/month1 vacant unit that's turnkey and we have listed for $550/monthThere is a detached garage that should rent for at least $50/month.Gross income = $2200/month, $26,400 annually. 1% rule = 1.19Sales price: $179,900Seller put $3,000 toward closing costs and credited us $4,000 for a handful of minor repairs that came up during the inspection. 30-year fixed rate mortgage at 4.25% with 25% down ($664/month)2016 Taxes: $2,009Insurance: $983/yearTotal PITI: $913ExpensesWater, Sewer, Trash: $218/monthVacancy & Credit Loss: 5%Property Management: 10%Maintenance & Repairs: 15%Total Expenses (w/out P&I): $1127 (52%)$2200-1127 = $1073 - $664 (P&I) = $409 cash flow/monthCash out of pocket (inspection, down payment, closing costs): $45,981Estimated cash-on-cash return: 10.67%This isn't a screaming deal by any means, but it's a solid base hit that gets us "in the game".

We have a small 3/1 that we live in with a detached 4 bay shop in the back.

You mention you don't know anyone in your area...that is your biggest obstacle.

Our OOS RE ROI was not impressive; we sold the duplex and only have a SFR that we likely will sell at next vacancy (it has not been vacant in a decade).So my suggestion would be to sell your owner occupied rehabbed SFR and purchase a owner occupied duplex to quad (preferable detached) and do the same process to the multiplex.I meet RE investors fairly regular. 

Another comp was over a mile away (with many other comps that could've been used closer) in a sketchy area and was a 2/1 with a 1/1  detached garage apt.