In Miami, we all know how people use rented cars, boats and houses to give themselves credibility.  5k for me is pocket change but I never like to spend money on a losing investment. 

We manage remotely as well, so this question may not be a good one for me to answer.

For me, in the LTR game, it's tenants. 

But the answer for everyone may differ.Here are the personal attributes I see in those able to achieve a higher than market ROI, enough higher to be able to “scale”.1- Knowledge of real estate principles, real estate law and real estate finance2- Minimum 3 -5 years full time, or near full time experience directly related to real estate investing3- Ability to utilize technology for increased efficiency, capacity, and accuracy4- Excellent hired legal counsel and excellent hired marketing help5- Established method(s) of obtaining consistently high QUALITY deal flow6- Ability to manage and choose people who are NOT employees: Attorneys, Appraisers, Mortgage Brokers, Real Estate Brokers, Title Companies, Surveyors, Marketing Specialists, Accountants, Contractors, Consultants, Property Managers7- A VERIFIABLE track record of success8- Ability to identify, analyze, and negotiate a deal that can be “worked” for “enhanced” ROI9- Some type of competitive advantage; for example for me it’s my ability to analyze and identify mortgage loans that are actually less risky than all other lenders believe (on the investing in debt side), and on the real property side it’s my ability to analyze”pull the trigger” with LESS information than other investors need,  combined with the ability to pay cash, or raise significant capital almost instantly as well as being able to obtain loans at the lowest prime customer bank rate with no recourse or personal liability.  

Depends on the person, but as a professional real estate investor it would be a no brainer for me.

Would it make sense to form this into an ADU or leave it as is?

One of the trickiest parts of flipping houses, at least for me, has been figuring out how to accurately estimate rehab costs.

After looking at your post, I realized it's probably necessary to have a dedicated real estate attorney handle this issue for me since it's serious and I might make a mistake big enough that probably will cost me too much money to fix.

As someone actively investing in STRs and looking to scale, this raises some concerns for me about the long-term viability of this strategy.I understand the tension between hotels and STRs, especially in popular tourist destinations, but I’m curious:How real is this threat?

Initially with the 3 rents it looks like it would be a go for me.