Now that you have the correct terminology, you can search for lots of potential solutions. 

Quote from @Michael Smythe: @Sean Gallagher legally you are correct, but many tenants do NOT know this.We take over properties all the time and close 80% of existing tenants sign a lease with us.True! 

I don't think you are going to be able to get insurance for two separate living units in a single-family when they are both illegal and likely do not have the correct egress windows (basement) for fire safety which could subject you to huge liability if something happens to either party.

My end game is to show you a path to financial independence, whether that be at 45 yrs old or 70 yr old.  

Start early, raise that equity well in advance, and make sure all those forms and verifications are filled out correctly.

Verify and double verify with the applicant that the information they have provided is correct and that all income is verified and all adults will have a background check. 

From what I’ve read in The Economist, demand for “off-the-beaten-path” destinations has increased post-pandemic, as travelers seek quieter, less crowded areas.In my backyard, investors and homeowners alike are increasingly drawn to areas like Gilbert and Chandler due to their exceptional growth potential and quality of life.

You're 100% correct, as always.

@Alecia Loveless is correct--tenants need access 24/7 to their electric service panel, water and heat, assuming those are individual utilities for each unit. 

This is an old thread that was revived with the recent reply, and re-reading it now, I want to correct a couple things.