This allowed us to not only tap into the tourism market but also gave us access to traveling medical professionals and students as well that would provide long term tenants if we were prevented from continuing with the STR model.Although we still have a long ways to go to meet our goals, we are excited for the foundations we had setup for this property to this point.

I had a contract on one for a great price but I ended up having to back out of it because it had foundation, septic, and well issues. 

Golf cart license are being restricted due to to many people, sinking foundations- either to close to unrestored sea walls or not enough pilings or fill dirt not allowed to compact, off grid experience, check on sewer and water infrastructure- when the water pump went out, the island shut down, the islands systems are being overloaded, what type of experience and thus rental rates are you shooting for?  

OCF did very graciously share this news and offer to either fix the foundation or for us to pick a new property.

Domicile: WA State (income tax free)Property location (Texas): (income tax free)LT gains + Depreciation recapture ~ $300k on a $500k income property ~effective / average tax rate = 12% for past umpteen yrs (relatively low income, avoiding IRMAA and doing Roth rolls (no 'realized' income, just transferring from tIRA to Roth = vast majority of annual MAGI income)In the end (coming soon, ~17 yrs) ALL remaining estate will go to charities / Charitable Foundation / DAF.

The suit cited that the lots are sinking and the homes have severe foundation issues. 

If you find a hole in foundation plug up with steel wool and the spray foam stuff. 

How do you go about deciding whether to add large scale amenities vs another building or using the space for something similar. i think even if the foundation is usable from for the ADU, far from a certainty, that your cost estimate is off by approximately a facor of 2 (meaning it will cost close to twice your estimate assuming you are not doing a lot of the work yourself).  

If it was my deal I would look at the big capital expenses (roof, foundation, AC etc) and determine if those will be a factor in the older property.

There's no benefit to anyone if they can’t rent the rooms, so your interests are their interests, and they're looking out for you - they actually recommended I back out of the first house I put an offer on due to foundation issues that they weren’t comfortable with.