I am a little confused by your question because of the way that you mention that you want to keep your CA home, as if to suggest that you would be moving to Phx. 

.$1,000 per week is "high wages" for this community.The building is large enough to support a large number of kids.Sixteen kids per week equals $2,000 Twenty four kids per week equals $3,000I can't make $3,000 per week turning this into a duplex.Someone mentioned turning it back into a church and that is a good idea - I like it because it can be done while I'm doing these other things and just have that as additional income!

What is good to focus in on given the criteria I've mentioned.

I mentioned that a BK would definitely buy time, but then would limit options for any kind of lender conversation. 

@Craig Bellot, thanks for the mention.

@Greg Scott & @Jon Holdman - I forgot to mention.

@Alex Saleeby thanks for mentioning the REIA groups!

You mention this opportunity as one-sided, but I think you should really just consider it to be 100% in line with your stated investing goal.

One would have to think through the potential liability issues.There are some invite only accredited investor groups (not sure I am allowed to mention the name) that informally share DD.

What hasn't been mentioned is that before jumping into real estate investing, it would benefit you greatly to start your education in real estate investing.