As @Nicholas L. said, property management is always an option too if you want a full hands off experience but can afford it. 

My partner and I would run and complete all construction and inspections.Has anyone had experience with this and if so, does anyone have a GC in TN that may be interested in this opportunity for hands off passive income?

We've closed on a handful together in the Myrtle Beach / North Myrtle Beach market. 

On the other hand a cash out refinance offers a lower rate over 30 years so lower payment, offers cash in the bank which can be used as PITI reserves or assets needed when buying more rental properties.

Understanding this is a very Tennent friendly state, does anyone have first hand good and or bad experiences in the area renting properties?

I suspect a legal, permitted garage conversion ADU will cost ~6 times your estimate if hands off and probably at least 4 times your estimate if you do the finishes yourself.  

On the one hand, I can see it as a positive indicator, for example of market health and increasing suburbanization. 

As such, they handed the lot over to the residential division instead of the commercial division, who then ran their own formulas. 

For context, I'm an out-of-country investor who tries to be as hands-off as possible.

Heloc or DSCR HELOC so you can operate with cash in hand.