The small business might highly benefit from S-corp but needs to be evaluated. 

It's gone thru foreclosure and last buyer paid cash, so no engineer's report easily found.   

Durham can be a little more hit or miss, but you can tell a lot from google street view as you're evaluating. 

Then when a few small passive income streams are flowing, accelerating the savings rate (still living frugally), I would find a real estate deal and evaluate it from an investment perspective (1% rule, cash on cash return scenario) and then use a first time home buyer's loan to get into it at 3% down. 

Andrew, the first one will always be a challenge but you will learn to easily dismiss the naysayers with time. 

Good starting point for evaluating annual income potential.

I decided to rent out my townhome rather than sell it because it got me into real estate very easily. 

The past few monthsI've been listening to podcasts, reading books, and evaluating properties by working with couple of real estate agents in my area along with going to go see a few of them in person as well.

What questions would you ask the owner in order to help evaluate the repairs needed?

We moved up north of you a year ago and I believe that housing prices have just about doubled (not scientific, just my observations)I still look pretty actively to help friends that are moving here from Cali and definitely note the type of properties that we looked for a couple years ago are now about double the price, easily 50%..You can add to the reasons that article listed, which are good guesses, the fact that tens  of thousands of Californians are flocking to AZ each year to escape the mess that CA has become.