It's worth paying the taxes if you can earn double the cash flow! 

Some require an inspector to check the work each time, with me as the investor paying for those inspections each time.

Some title companies might assist in this process, but it's best to check directly with yours.

Realistically speaking, you'd need to double that price range ($600-800K) to see low-end duplex options on the market.

How can I check to see if the unit is illegal not?

Check with your county tax assessor. 

Please check out this recently published article on BIggerPockets which addresses your exact question - BRRRR financing pros/cons of all the options (Cash / Hard Money / DSCR / refinance options)https://www.biggerpockets.com/blog/brrrr-loans-what-are-the-...

NY isn't TN so you need to do your research and check the comps.If you acquire it, you'd have an option to flip it, develop it or live on it.  

This is so that the lender may demand full repayment if a property with a mortgage is transferred into an LLC and a due-on-sale provision is triggered.Before putting the property into an LLC, make sure to check with your mortgage lender.

You can also check meetup.com or search facebook for real estate investment groups, clubs, or meetings in your area.