Even if it is only currently a legal two family, if it is located in the right zoning district, the "use" of a four unit building may be allowed and it could be an easy legal process to do the conversion. 

I am in the process of starting a fund and want nothing to do with a 506(b) because of the risk involved with the "sophisticated" definition and reporting requirements.

Since it is not registered you will probably have to go through the state process to redeem.

I'm working on the lending - I'm pre qualed with one and will finish the process with a few others over the next couple weeks for options.Thanks for the ideas on locations!

Question is, do I start the expensive eviction process that would end after the lease terminates or just ride this out.

My fiance bought the house that we live in, so through that I have a mild understanding of the home buying process.  

In the process of selling an investment property on the west coast and moving those dollars to AL.  

You will learn so much in the process and find great deals that will be very evident to you.

@James Masotti give me a call and I can talk to you about the process. 

As for bad tenants, if they pay the rent you just deal with it and see if there's a way to get them out.If they don't pay rent, you go through with the eviction process and just deal with all the hurdles of the LTB.If you can hold the property for 6-12 months without any rent and have a bit of cash set away for incidentals, legal, intentional damage etc... it will never be too big of a deal.