Not so legal basement apartments

[Martin Sterling]

Greetings,

I'm a wholesaler who lives in New York but I'm investing in New Jersey. I found a property at a fair price that I know I can get an investor to buy. It's a duplex pulling in $2k per month, but the current owner is also renting out the finished basement for 700/mo.

I wanted to know, is it worth it to continue renting the basement out? 

What is the penalty and worst case scenario? 

Is the risk vs reward worth it?

How would this affect an investors decision to buy the property?

My goal is to be able to wholesale the property not for a fee, but for equity.

Thanks in advance.