@MariaIts great that you have a private bathroom for the guest.I would certainly do a rental agreement (independently of what portal you will use).Re: background It all depends on your comfortable level.

We do prefer to stay on the safe side which is why our plan was just to sell both.

As for budget, I'd like to stay somewhere between $200 - $400K range if that's possible.Someone mentioned Little Village to me and I was wondering if anyone had any thoughts on the area for multi-units?

The one who stays several steps ahead of you!  

If you start slowly, it gives you time to learn and network, and in the meantime, you increase rents and your mortgage stays the same, which opens that gap in your DTI. 

I like to stay within 30 mins from home but know I need to branch out. 

If you feel comfortable enough rejecting this offer completely and doing it in public, post the address here as a starting point.

@Marisa Faulkner it is very rare that someone drops w2 and stays in RE.

I'm not particular about staying in Durham as I plan to take as passive an approach as I can (to that end I've been listening to the Passive Real Estate Investing podcast, but Norada is US and I'm not looking to go to the US quite yet if ever).  

Focus on choosing a solid house in an area with ready tenants, don't over pay and make the improvements to be comfortable and tenant proof.