I sent these notices to Jay, who assured me personally that his team was aware and already working with the city inspectors on it.

If you go over the Lease Agreement with them prior to handing over the keys, during the signing of the lease, you are making them aware of their responsibility.Yes, there are some minor little things, you may turn the other cheek on. 

Any further tips or cautions I should be aware of before putting on my HAZMAT suit and doing this deal?

A jurisdiction can, and in every case I am aware of does, prohibit the renting of a JADU without owner occupancy. 

Please be aware that if you use it now - you likely can't use it again.Another question to ask is if you and your wife have made an election to file as a "qualified joint venture" instead of having to file a partnership return.This election could have allowed you to avoid having to file partnership returns which would also have saved you the fees from having to pay for filing the partnership returns; which I assume weren't cheap.

Could I go buy a whole city block in a war zone in Detroit?

What should I be aware of as I go through this process?

I'm aware of the laws around this, and some strategies regarding it. 

Landlords need to be aware of FHA, but you can verify a tenant lived where they've said, if they paid their rent on time, if their deposit is returned in full and if they would rent to them again.

General CPAs may not be aware of them.