I lived for free for a couple years, while collecting rent checks. 

It would cost a lot to get the planning approval and do a complete renovation of the 2 units.Can anyone suggest what would be my options at this point?

Can you give more details on your numbers, purchase prices, rehab costs, time to complete rehab, ARV, monthly rent?

If comps are scarce, you might also consider the replacement cost approach, looking at what it would take to rebuild and adjusting based on market conditions.

I would also send the insurance company this same letter and tell them they are going to be responsible for the cleaning and repair cost.

@Voley Martin Make sure you get updated insurance costs.

Where is the property located.assuming the seller added the ADU and did not disclose the ADU in disclosure forms, you may have recourse (depending on the rules of your jurisdiction) but it may cost you some legal fees. 

I know that if a cost seg, l would need to back that out of my California return.Your answer seems to confirm what I suspected.

(that means I work for Airbnb as an independent contractor, a paid, by Airbnb, consultant to new Hosts).Here is my "tip" that I send to new Hosts:"Pricing is key and worth doing some homework.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.