If they are not, you have to bring all of them up to code. 

Apply for a Conditional Use Permit to increase the allowable size of the secondary residence and sell the entire property with two homes on it.Both options require approximately the same amount of time and money to change entitlement, barring any neighboring resident opposition.I believe the first option would be more lucrative, however, the Zone Change is a 50/50 chance.

I am completely unfamiliar with tax code and will be reporting the income for half of 2014 next year.Any help is appreciated.Tiffany

You may not know how to handle: tenant relations, maintenance requests, contractors, turnover, lease admin, property managers, "professional" tenants, neighbors, capital expenditures, municipal codes, federal laws, evictions, lawyers, budgets, taxes, etc. and how each one can affect the profits (or eliminate them.)

Owning or renting a post hole digger rather than a bar and shovel.

For cash buying (wholesaling), high % equity is super important - otherwise they cannot accept your discounted offer - and you will fail trying to negotiate directly with banks unless you know that world and have proof of funds, etc.Forget foreclosure as motivator - you'd be better off looking at % equity (minimum 40%) combined with other motivators such as:1) absentee owner ("tired landlord" & "2 house payment" profiles)2) probate/estate sale3) divorce4) code violations

Getting stuck up in litigation doesn't sound fun or cheap.On the other hand, if you can prove she hangs out with a drug dealer, I'm sure the TX Bar Association would love to hear about it...

@Wayne Brooks@Travis DaggettBtw, the county record I found has some code for the deed type (the code is ST), but I don't know what that means. 

You do want to make sure however that the HO policy contains a guaranteed replacement cost coverage and at least 25% code upgrade coverage.

So check with the building dept or code official to see if that would be required.