Kid Flash arrived just in time to save the heroes' life- and when he was cornered by Dr. Alchemy, he finally realized Barry Allen was dead- he accepted the death of the Flash.
In order to save his friends- and himself- Wally put on the spare Flash costume inside one of Barry's old rings (which Green Lantern had taken from him back at the Museum), and saved the day.
Green Lantern and Jay Garrick then said Wally had earned the right to take over Barry's place as the Flash. (By the way, for those of you questioning Jay Garrick's presence in this tale... yes, it's a bit confusing- for right after the Crisis ended, Garrick and the rest of the Justice Society were transported to Limbo and stayed there for a few years- in the 1986 special edition, The Last Days of the JSA. The obvious conclusion is, the Flash Annual #8 tale happened immediately before Last Days... so no real problem there.)
So if Wally was really unmasked during this told-later adventure, then it kind of negates his Legends bits- and the first few numbers of his own series, right? Not exactly- The way I see it, we can get away with a clean-cut continuity without having to "negate" anything- after all, the whole thing about the Flash is transparency and easy-access-for-everyone, right? So let's keep it that way!
Summing it all up, then:
The Flash was unmasked as Kid Flash in the "Year One" tale of Flash Annual #8... Meaning the press, and the world at large, realized it was Kid Flash who was sporting his late-mentor's identity- but never made the connection between Kid Flash and Wally West!
...so by the time the Flash (now Wally) began having identity crisis problems, he moved to New York City- looking for his friends' help- the Titans' help... even though he was not a member of the team at the time.
Legends #1, after Wally had defeated Deadshot: Flash: "Gotta get away(...) find someplace quiet where I can think- and these days the place that comes closest to fullfilling that description is the Titans Tower. It's not exactly home- but for now, it'll do!"
We can only suppose Wally had dropped off College by the time he first took on the Flash's ID (Flash Annual #8)... for then it was right off to Legends, and his own series- where he lived by himself in Brooklyn, New York- and after winning the lottery, moved to a mansion in Long Island (Wally ended up losing his money in Flash #14, and had to move to a very poor New York tenement by #15... but that's another story!).
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