The larger unit will have higher maintenance/cap ex even with coastal environments being harsh on some items.I suspect your expense estimates are far too low especially if you kept the BP calculator default percentages.  

Will be glad to check options in more detail.  

Happy to go into more detail, reach out!

Get all the facts and details before you act.

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.  

To be honest with each of you, he’s not the only one facing this dilemma... without conveying too many details, let’s just say he comes from a very big family and each young family member receives this “inheritance” when they turn a certain age.

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. 

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.