Idk if it's even legal to evict for that but I've literally had zero issues.

We would hold ownership of the units and service them when needed. 

How much electrical service does each unit have?

Ground rent owners try to collect fees they are not entitled to like late fees, some legal fees, more than three years back etc.

Our realtor called his legal hotline and their opinion was we are good.  

I own a small construction company where I provide all types of services but am focusing on flips right now.

Not only will the bank give you a hard time about the knob and tube but you will also have a tough time with Insurance companies. a new 200 amp service will probably run you about $2- 2400, rewiring the house, sheetrock, spackle and paint will probably run you another $4-5000, depending on how much has to be opened up and fixed.

And will I run into any legal trouble doing this?

Hi,Our wholesale company is looking for an investor friendly broker to form a partnership with.More or less you'll be listing the investment homes on MLS - We grab off market properties and bring directly to you for listing.I realize there are several companies who provide exactly this service.

This is what you can do , leverage that 500k windfall that you now have , look at getting 3 duplexes in the 550k range, put 25% down on each , a mortgage of approx. 400k won't be unmanageable , hopefully after debt servicing and operating expenses, your net should be about 1k on each , and if you can manage these yourself maybe you can maximize your return.