Yes that is an issue.

Like most things in life, it's a double edge sword.Buyers benefits include being able to negotiate terms, lower down payment, not having to qualify for a loan with a bank (if you have issues preventing approval).  

Also, in terms of out of state that's a little trickier for me since being inexperience that would just add tons stress by not being local to solve issues. 

One thing I recommend is to learn what issues in a building or property might give you issues when insuring it. 

The incentive for the seller (who's already had one deal go south b/c of buyer financing issues) is a quick close during a slow time of year and no bank headaches.

I have attached a Washington State, standard MLS PSA verbiage for you to look at regarding this issue.

I am having issues with my BRRRR Calculator functionality and wanted to see if anyone else is experiencing the same issue?

But, this IS a landlord-tenant issue, not a realtor issue. 

Do you see any issue with this or have any recomendations?

All of the above assumes that the original house needs little renovation work.Before committing with a contractor, make sure that you get with the local town to make sure that you are allowed to split the house and there are no issues that would prevent it (like egress, unit separation, etc).