Namely timing, cost, and getting permits and such. 

I've dealt with a lot of permitting and zoning issues, which are never fun or go the way you planned. 

I assume I need to apply for a permit but I'm not sure of the alterations that were made (what walls were originally in place or new wall that were built to convert it to single family).

There were open permits for the work done but the title company was unable to find the CO.

I am Connecticut raised, received a degree in architecture at Wentworth Institute of Technology in Boston, Massachusetts, and have been living and working in architecture in Denver, Colorado for four years in June 2020 with experience in developer driven SFR, Duplex and Multifamily as well as custom single family residence design and project management.

As a flipper, you will need to know a lot about managing jobs, proper construction techniques, permitting, inspections, building code, etc. 

https://www.sanjoseca.gov/business/development-services-permit-center/accessory-dwelling-units-adus/adu-amnesty-programAlso, you could try speaking with a local architect like @Adam Mayberry. 

Let me know if I am missing anything.Purchase cost of an old house on a 7,000 sq ft lot        - $ 1,800,000Architect Fees                                                            - $     30,000Other Soft Fees (like Permits)                                     - $     45,000Construction (3,000 Sq Ft)                                           - $   700,000Finance Costs(Borrowing around $1.4 m for 2 years      - $   110,000as primary residence mortgage)Selling Costs (5% of $3.3 mil)                                       - $   165,000------------------------------------------------------------------------------------Total Costs                                                                 - $ 2,850,000Selling Price                                                               - $ 3,300,000Profit                                                                         - $    450,000Are these realistic?

When I tried to pull permit for an addition, the city asked the issue to be resolved before permits can be issued.

Let me know if I am missing anything.Purchase cost of an old house on a 7,000 sq ft lot - $ 1,800,000Architect Fees - $ 30,000Other Soft Fees (like Permits) - $ 45,000Construction (3,000 Sq Ft) - $ 700,000Finance Costs(Borrowing around $1.4 m for 2 years - $ 110,000as primary residence mortgage)Selling Costs (5% of $3.3 mil) - $ 165,000------------------------------------------------------------------------------------Total Costs - $ 2,850,000Selling Price - $ 3,300,000Profit - $ 450,000Are these realistic?