I would also advise that you keep an emergency stash of cash in your regular bank.

They are regularly getting poor valuations compared to the cost to add the ADU.   

From there it's your regular ol' cash on cash return calculations!

Would you still use your friend as your GC and just pay him his regular rate (and would they be happy about the new arrangement)?

They may/will not even look at the refi of a cash property unless you supply the HUD from the purchase which you do not have cause you haven't closed the loan.I think if you pursue this you are heading toward headache land and you may possibly screw yourself. 

And he knows who's working regularly, who's only off-and-on, who's going through troubles, who needs extra work.

Quote from @Will Ghidotti: Hi Amby, I am a real estate attorney and handle this issue regularly.

Even updating the listing regularly so the OTA knows there's someone actually running the place behind the listing.

In which they dont even ask for SSN (I had to edit the application to supply that)?

There's also regular inspections of both the living conditions and conditions of the home, and I've known some LLs in my area to fail for really stupid things (like a broken screen that the tenants must have broke), and if you fail no money until you pass.