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.  

Does BNB Calc show the lifetime of the properties revenue or is it an estimate of what it could make or is it showing the last 12 months of revenue?

I am not going to rent a nice house to four 19-year-olds working at McDonalds because it's absolutely foolish, but I will put two of them in an apartment and give them a chance to earn a reputation.

This is all conjecture as I am not an estimator or contractor, but I know Monteray Consan 20 works well.That was my fear with this quote, it's heavy charges to tear down and almost nothing about doing the drywall after they tear it down. 

Year leases offer consistent income (less chance of vacancy), and tenants can plan to vacate after a year.

And there was no chance in hell that my investors would not get their money back: I had confidence in my deals and my ability to manage contractors and enough of my own capital as a risk buffer.

Your conservative approach to estimating income provides a solid buffer, and the strategic location adds a layer of security.

I let them know, yes proceed on T&M not to exceed the original number and do not do any work above that number.Week later contractor finds an issue and says "hey, we have another issue and we can take care of it for $500, As it stands I believe I am going to come in under my estimated total." - So we authorize the work.Contractor submits the quote yesterday for $8k and is threatening me about it. 

I am estimating at least $50,000 between furnishing it and updating.How does this look:$1.3 million with 20% down DSCR loan buy-down the rate from 9% to 8% 30 year = $9,332 (principal/interest/tax).Utilities - $750Income - Was thinking $250 per day but let's say $225 per day for each unit (30 days) just looked at AirBNB and AirDNA in area = $13,500 (.20 vacancy) = $10,800.I would manage it, but still need to think of cleaning fees.

Your estimated first-year NOI is $29,040, but after loan payments, you're left with a negative cash flow of -$9,126 and a DSCR of 0.761, indicating the income doesn’t cover debt service.