I would plan on paying for the project out of pocket.

I’d plan for extra amenities like special decor or concierge services. 

. #4 See everything you plan to buy in person. 

Raleigh specifically has introduced “Fast-Track Plans” designed to streamline permitting to build ADUs faster and more cost-effectively.

Hey @Chris GarnesI just came across your post, and it immediately reminded me of a project I handled with a colleague in San Diego, Dennis Bragg - https://www.biggerpockets.com/business/page/3607  - You’re sitting on some serious potential with these two properties, and your plan to step back from construction while finishing them makes total sense.For Home 1, with no mortgage and a prime design upgrade underway, you’ve got flexibility that most investors would envy.

Where do you plan to invest?  

I used to work in Planning & Zoning. 

The plan is to use the proceeds from this rental to buy another rental property for about $650-700K, plus to pay off the home that they live in now ($260K owed).

That being said, I will preface this with the fact that I have a legal background, specifically with estate planning and asset protection as it relates to real estate.

IF you plan on going back someday, and this is the home you want to move back to, then renting it would be a good idea as long as you estimate that it will cover itself, or preferably, cash flow, which it appears that yours will at @ $2K or so per month (after expenses).