As for the decision, it's really tough for any of us to say without knowing your goals, your situation and the numbers on this particular house.

This amounts to lost opportunity because if you had purchased RE, at the closing it can start producing return. 5) ADUs detract from the existing structure whether this is privacy, a garage, or just yard space. 6) this is related to number 1, but there are many more buyers looking to purchase homes for their family than there are RE investors looking to purchase small unit count properties.

They make you an offer on your house on a 12 month lease.

@Michael Daniel Ultimately, it's all about confirming what the housing authority pays.

I've done this on one house in order to cut costs - since then, I've added a meter with the utility company but it's a good workaround for the short term. 

They are a corporate housing company.

Your biggest issue is that $50k may not let you get a nice house and have any reserves.

And addressing my item #1 comment, almost always, when a "distressed" homeowner is approached, they initially are grateful to have the loan brought current, but before long they forget the circumstances they were in and you become the bad guy that stole their house.

Quote from @Charles J Sabo: This will be huge for house hackers out there. 95%LTV on 2-4 unit properties.

@Frankie Paterno In most places you will likely find that your $1.2MM will go much further with existing built as opposed to developing.