They wind up being either unusable space or just storage since today people want a door on a bedroom and dont want a walk through bedroom for lack of privacy.

Sounds like an encroachment that should have been caught when the house was built, look up adverse possession, you may not be due much if anything.I suggest you take what they give you as it doesn't sound like you have much of a financial loss if your home is far enough away to be marketable, I assume you bought the house with the house next door.

Demand they do or allow you to or2.

Having the credit check in place and screening out poorest credit buyers helps too but if they could get a conventional loan they might not be knocking on your door for a deal anyways.

The down side is it is thrashed and there are no tenants staying there which makes it ripe to go in and take electrical and plumbing which will happen if you do not secure the property (doors and windows) immediately.Good Luck on recovering any money from that PM.

Right next door sits a 16-unit complex (similar layout), all 1/1’s and renting for $500.

I had this problem, but it was with a tenant of the rental next door.

The problem is it's right next door to me.

There is a property (SFH) I am looking at that has a rental property (2br apt) in the back yard sitting on top of a garage- the entire property is actually zoned as a single family dwelling, but I was told by the owner that because that rental unit/building was built a long time ago, it was grandfathered in as a legal dwelling without special permits.

That if I can't buy a property at $100/door cashflow on a 15 year note it isn't worth it.