It is important you pick something you enjoy otherwise it will become work and you'll burn out.  

But like you mention, there were many areas were this could have gone sour and burned me.good luck!

In this economy, in this socially engineered fractional reserve banking system, productivity resides in working smart not hard - you know this!

Your approach of 1/useful life of each item is the best practice as long as there's a little inflation built into the replacement costs and some padding for unknowns.One of our standard due diligence items is an engineering inspection that includes estimates of the useful life remaining on building components.

Before buying call the city to ask what that street allows for, do not ask about the specific house or you can open a can of warms.Hire also a Fire consultant that knows the bylaws in the area.If you really want to buy an illegal unit and legalize it later, then also hire an experienced architect/engineer that is used to legalize rentals.The most "friendly" area for illegal units is Downtown Toronto, there is an extreme need for apartments , if they would shut down all illegal units, there would be thousands of tenants on the street.If you still think about buying an illegal unit and keep it as is, make sure you comply with Fire cod - that is non negotiable - and have an exit strategy in case you are sooner or later shutdown by the city.If you get shutdown and cannot or want to legalize it, you will have to change doors or exits, remove kitchens, etc... etc....

I'm just reading till my eye BURN.

If it's a Corps of Engineers lake, make sure you have a mowing permit and what size trees or shrubs can be cut.

Paint can be kind of a tricky one since wear and tear vs damage is a little more difficult to establish, it's not like having a burn mark or permanent stain in carpet.

I think the engine-destroying cheap stuff is $4.15-4.29.

Be very careful of the $10,000 Detroit deals as several people have been burned....seems they were all out of state investors.