I have done some research but curious about the experience people here have had. 1.

If it has no central air/heat I assume you’d probably get an extra $1,000 or $2,000 in value?

You can't assume it was the neighbor.

There are many homes in areas outside of Claremont that are selling for $500k to $650k Many of the people we know are buying homes like this one with a construction loan for the ADU ($100k) and buying a home for $700k + $100k : $800k total at 5% down payment and ending with a total payment (PITI) of $6k minus $2k rents from ADU Total new payment of $4k which is easier to make and once interest come down some, they will refinance to drop their payment to $3k to $3,500 per month. 

You will not get a lot of responses on here for several reasons - too many questions, not a big enough pool of people to answer the questions, and most agents have no clue about what it takes to work with investors. 

This is the least likely thing for people to publish on BP, as finding them is key to the business and promoting them on here will inundate them with calls. 

Drive around, ask people that live there how they feel about the area, and, if you can, live there for a year.

Lots of people looking for homes on that page. 

It was a super-tight deal profit-wise for me anyway, but I assume I have no choice now but to back out?

You can utilize low down payment loans by house hacking your next property.3) Partner with people to invest your capital together.4) Invest in lower cost marketsThe tough thing about real estate investing is that it's capital intensive.