They have low interest loans which make buying their property subject to their existing mortgage a great exit strategy for these sellers. 

My situation: I have an FHA loan at about 5.5% and my understanding is that it usually makes sense to refi once rates are about .5% lower than your existing rate, which means I may need another .75 to 1% decrease in the rate.

10% down second home loans still exist.

if something is just sitting on the MLS looking too good to be true... then it's too good to be true.these properties are going to have higher costs overall, be in more challenging neighborhoods, have very gnarly deferred maintenance and capex, potentially have liens, be high turnover, and require expert, highly knowledgeable, localized support to be successful. see for example this thread.https://www.biggerpockets.com/forums/48/topics/1137397-balti...and even at those price points, i think cash flow is fairly low to non-existent if rehabbed to a high grade, especially with DSCR debt. 

When we did it, new management had old manager transfer all funds held in relation to our account to the new management, including existing security deposits. 

It would be hard to raise the rent a ton on existing tenants especially if they are close to market rates. 

You may have better luck with a cash out refinance, which would allow you to pull equity from the property by replacing the existing mortgage with a new one.

That didn't exist back then. 

My thought was to build:1) detached ADU on the new lot with the existing home and 2) build a large SF and another detached ADU.Of note, in this county the ADUs can be up to 1500sf.

Every 4-5 years they would use the equity in their existing home to get a HELOC/refinance mortgage to purchase another house.