It's an 1890's Queen Anne that was chopped up into an upper apartment with existing long-term tenant, and a hair salon downstairs that I converted into a 3/1 Airbnb.

I'm looking to convert my Brookland DC row house basement to a legal rental unit , I was wondering if anyone has done this, what was the cost?

You may want to consider promo rates on an equity line as well and if they offer you the option to convert any part of the equity line into a fixed loan.

Our idea is to convert part of the home to a Jr Adu and get rental income that will offset the expenses for dear dad and let dad live rent free.  

These supply issues mean that homes in coastal states and other expensive areas are going to appreciate quickly, though as you’ve found, they’ll also be chronically cash flow negative.Also, as Patrick said, I think looking into states like Alabama might be your best bet, especially if you’re trying to invest in new construction homes (which are generally pricier than older housing stock) at 80% LTV.Plus, the state roughly meets your criteria: it’s a landlord-friendly place, property taxes average under 0.40%, and there’s not a lot of snow in Alabama—Birmingham, for example, gets just an inch or two of it per year.

The other day I had the grand idea that if we converted the basement into a livable space, we could keep both tenants in their apartments and collect both rents while still following the FHA requirment to live at the property for the first year.

There are also a lot of people converting some of their units to vacation rentals, which further skews the numbers. 

If there is already plumbing in the basement then convert that into another bath and kitchenette. 

I am waiting to get my final permits from DCRA and about to do underpinning on the row house in Brookland, as I am converting the basement to the one bedroom apartment with the front dig out for the separate apartment entrance.

Property Manager in that geographical area had a father that was a handyman.   35K into it and the property was somewhat pretty  and we converted it from a two bedroom to a four bedroom.It appraised for 160 so I did a cash out refi.