The house also had an addition added on in the 1820's.

Also from what I understand the building department is backed up unless you hire an expediter, so another 6 months for plans and permits or additional 3k I believe

I have about $20,000 liquid that I can tap into from savings, which I would use a portion for the down payment, and my credit score is 710-714 so I'm not opposed to obtaining financing through a local bank or credit union for financing.Also, what additional books, materials, or resources would you recommend that I could read to get myself more familiarized with this form of real estate investing?

Write up a rental agreement addendum -- month to month at first with monthly property inspections, an additional $100 bucks a month rent until deposit is paid. 

Additional concerns: tax implications, risks, benefits, & any additional information especially involving paying the least amount taxes. 

The 1031 does let you use it.But there's an additional component that is also at the core of a 1031 investor's strategy - leverage. 

The unit I am living in is a 1 BR/1 BA on the second floor of the building...the door to the attic is right outside my entrance and goes up to a big open area that USED to be 2 additional bedrooms, however, it has been vacant for years as there was a fire in the 80's.My handyman took a look and agreed that he could definitely add the 2 bedrooms, no problems...I know egress windows will be a major factor and I am also looking into the heating and electric to make sure it is linked to my unit's heater/panel.What else should I be looking/planning for?

My thinking is the extra money each year could be a down payment on an additional property or extra more for a value add property.

According to my insurance agent, the only additional insurance requirements from a “normal” four-plex is taking into account flood risk / insurance - no other liability concerns.I’ve never owned water front property myself, let alone rental property on a lake.

However, I just bought an additional two properties (cash purchase) and I think I may have difficulties with the Refinance portion due to DTI (Debt to Income) ratio.