Let's simply identify the goal, and explain a solution as succinctly as possible, shall we?
Goal:
Create mutual WAN fail-over using indepently-networked ISP connections at neighboring houses.
Solution:
A dual or multi-WAN router located at each house, each with fail-over capability, a built-in multi-port switch and the ability to assign ports to different LAN subnets.
Run twin ethernet cables between the houses, each a different color or uniquely labeled if the same color (I'll use blue and red in this example).
At house #1, you'll plug the blue cable into the second WAN interface (ethernet port) and the red cable into the last LAN interface.
At house #2, you'll plug the red cable into the second WAN interface and the blue cable into the last LAN interface.
On each router, you'll assign the last LAN port its own subnet, to segment it away from the other LAN ports (ie. the neighbor's internal network).
Also on each router, you'll setup the WAN failover schema. Then you're done.
Yes, I realize you could run just a single cable, but then you'd most likely have to tag and VLAN the traffic between each device, trunk that tagged traffic, etc. -- it's more complex, less redundant, and also doesn't allow for indepdent duplex bandwidth dedicated solely to each secondary WAN link, the way simply running 2 cables would.
If the process above sounds too complex, you have a couple choices. Either get a networking-knowledgeable friend to do the setup, or use something extremely user-friendly like a pair of Peplink Balance 20s, hook each one up to its primary WAN connection, get the house-to-house cables ready, then call Peplink support, explain to them what you want to do, and they'll literally walk you through it remotely, even via screen share if required.