However, you can easily keep an eye out for either a single family home that you can create an in-law suite (whether in the basement, or converting a family room or other separate area of the house) or even a townhouse with a walkout exit that could have the bottom floor serve as an in-law suite.

The appraisal will help determine the price that the buyer will pay for the property at the end of the rent-to-own period.It's important to note that the property inspection and appraisal are separate processes, and they may be conducted by different professionals.

Do a separate post on the two land lots.  

New bank accounts, costs of setting up the LLC and filing every year, possibly separate tax returns, etc.Even umbrella insurance is unnecessary, but it's a much simpler option if you feel the need for additional protection.

There is a purchase contract which happens as a separate contract when the option contract is executed.  2 - The Option Contract is an agreement between 2 parties where the seller gives the option buyer the exclusive right to buy the property for an agreed upon amount, within a certain time period. 

Gotta separate the meters if it's not that way already.Single-family to duplex applications are normally successful in nyc/nj though

The basement is about 800 sq ft with everything we need and separates us from the main floor (kitchen and living rooms) and 4 bedrooms upstairs.

I understand why this would be frustrating for an owner, but having the separation between you and the tenant is vital to making the whole thing work. 

Another issue that can be problematic and costly, are changes to floor plans that have been made to a home over decades, especially "conversions" where a large home is cut up into 3, 4 or more separate units, with kitchens and baths added for each, and often fireplaces blocked off or removed.

Separate actions, typically heard together.