I agree with Jason... speaking from experience new construction around here can be years of headache and legal action. 

The beginner should take a beginners course on real estate, and learn all the fundamentals and legal theory as a foundation.

The appraisal just came back and we were told that although the property is zoned for multifamily, the MIL does not meet legal set back and is effectively on the property line.

The seller could sue for liquidated damages, or maybe the attorney would advice negotiating a buy out of the contract as in we will double our EMD that the seller gets to keep to back out.There is a way out legally. or buy it and relist it for sale, although they might lose a lot more money than the attorney would coust.

Not sure of the concept or the financials, but does anybody see and legal issues?

A maximum of 1 accessory dwelling unit shall be permitted on lots where legal primary single-family dwellings are allowed.5.

I know you'll be successful because with this level of perseverance, it's impossible to fail in the long term. 

Not impossible or an absolute NO, but NOT without the right strategy.

@Holly Schuster you are asking some pretty specific legal questions. 

"In Pro-Per" if you will.Then you'll be able to petition the court for Letters of Administration (no will) or Letters Testamentary (will).Those are one of two documents that give the PR (here in CA) legal capacity to encumber a probate property.