Trying to use what I've got and make things happen

[Account Closed]

I currently own a 2 bed and 1 bath home with a detached garage (house is 911 sq ft and one car garage is 280 sq ft). Bought several years ago with my now ex-husband as a fixer upper. Some improvements have been done over the years, but it still needs some more work (there are multiple unfinished projects). Now that I'm divorced, I've found myself without as much disposable earnings and very little in savings.

I'm considering taking out a HELOC to pay for some upgrades to the property so that I can "house-hack". I'd prefer to do short term rentals because of the potential to make more earnings as compared to long term tenants. I'd like to avoid as much debt as possible and also get it paid off as quickly as possible.

Zillow says it is worth about $214,000 and I still owe $106,000 so I'm pretty sure there is some equity available in the form of a HELOC.

These are a couple of my options that I'm considering:

1) Convert the garage into an ADU. It will need a new roof, electricity brought up to code, hooked up to water and sewer, insulated, and heated.

2) Turn the attic of the house into a 3rd bedroom with a bathroom (around 200 sq ft of usable space) and possibly a new staircase that isn't so steep and maybe with a separate entrance from the main house, if possible.

3) Build a tiny/small home in the backyard (300 sq ft or less) and rent that out as a STR, but it would also need to be built to code and hooked up to water and sewer.

Once I'm making a profit of some sort, depending on which option I go with, I'd like to start fixing up the main house. It needs a lot more work before I'd feel comfortable listing it as a STR. The following needs to be done: heating system installed (I'm currently using a wood stove because the baseboard heaters made the electricity bill outrageous in the winter) but I don't feel comfortable having renters use the wood stove as their heating source. It also needs some electrical outlets fixed and possibly rewired... maybe even the house needs rewired since it was last done in the 70's. If there are too many outlets in use the circuit breaker trips. There are also a lot of cosmetic things that need to be done.

I don't feel comfortable listing my spare bedroom right now as a STR because I really value my privacy and mainly because the house needs a lot of work done.

Am I overlooking anything? Suggestions? Input into which options would be the best launching point?? Or should I sell and start over with a new property that doesn't need as much work?