However, in adding the bedrooms, no new sq.ft will be added.

Then they won't need an upfront payment for work they haven't provided yet.Also, get a signed contract, copy of the drivers license, contractor's license and be added to their liability insurance.

So I'm strongly considering adding a handful of these to my buy & hold portfolio.I understand that there's no "risk-free" method to acquiring these properties subto, but have any of you had success over the long-term acquiring properties with VA loans attached?

You can also search Google and read reviews.

If you DM me your email address I'll get you added to our events email list.Regarding the options you listed, I think #1 is best.

However, if I tried to sell this note, I might have a difficult time doing so because there is no open market for selling notes and adding the fact that the note is in default, I might have to discount the note if I wanted to get cash for it.

Or, is there a manual workaround like keeping track in a Google Sheet or Excel?  

Maybe adding a parent a lease co-signer (and payer) might help.

I did a quick google search yesterday trying to find one in my area and got a lot of corporate type responses eg fill out this form and check the website etc.

Not sure where the ad litem attorneys stand in all this.