This article provides a guide to design and build a handheld, real-time photoacoustic (PA) imaging system from simulation to realization for animal neurological disease models. A pulsed laser and array-based ultrasound (US) platform were utilized to develop the system for evaluating vascular functions in rats with focal ischemia or subcutaneous tumors. To optimize the laser light delivery, finite element (FE)-based simulation models were developed to provide information regarding light propagation and PA wave generation in soft tissues. Besides, simulations were also conducted to evaluate the ideal imaging resolution of the US system. As a result, a PA C-scan image of a designed phantom in 1% Lipofundin was reconstructed with depth information. Performance of the handheld PA system was tested in an animal ischemia model, which revealed that cerebral blood volume (CBV) changes at the cortical surface could be monitored immediately after ischemia induction. Another experiment on subcutaneous tumors showed the anomalous distribution of the total hemoglobin concentration (HbT) and oxygen saturation (SO2), while 3D and maximum intensity projection (MIP) PA images of the subcutaneous tumors are also presented in this article. Overall, this system shows promise for monitoring disease progression in vascular functional impairments.