However Insurance company today served us (LLC) with a legal suit to get basically out of some parts of the tenant's lawsuit and including passing legal fees to us. 

Hi there, I was walking around looking for distressed properties using the info I learned from these forums and identified a target.Then I went online to the property appraisers and found the property - BINGO!

Is it legal?

She’s in Prince George’s County, MD and is wondering whether this is legal or not.

., including things like the reserve fund for each property that's just sitting there, amortized cost of legal, accounting, insurance, etc. for the overall business, inspection, loan fees, closing costs, rehab, holding costs, etc.).

Ambulance chasing attorneys know their way around and can legally navigate around Insurance Policies.

It's affordable (even now), researching it online is easy, the people/culture fits my personality, and travel is a breeze from the bay area. 

I am curious to know if anyone has considered doing this, does this, or if it is even legal, etc.? 

.- legal?

You may be able to find out what it would take to legally turn it into a 3 bedroom and make it work.