I added a decent amount into the house (new paint, new hot water heater, brand new kitchen, better layout) but I’m not sure if that’s enough for me to appraise for 20% equity. 

You are "off their standard checklist", and unfortunately most bankers have no idea what to do when that happens.The end result is that you get to educate your banker on what you need.  

The water bill can be transferred to the tenant's name.

When turning basements into ADUs, and the breaker box, furnace, and water heater are down there, what are best practices for handling them?

I love the idea of renovating your carriage house - does it have any water and electric hookups already?

New roof, new water heater, new Electrical panel, New HVAC, new Concrete driveway, new Concrete steps & walkout basement, Open space of kitchen and living room, fully finished basement with wet bar and new full bathroom, new windows.

Always apply the same standard to all applicants.

There are many buildings with systems reaching the end of their life - Galvanized hot water risers, leaking vent stacks, aging window systems, outdated elevator and fire safety equipment.

Under the "moisture and/or water" section the sellers stated "water in basement during heavy rainstorm of june 2023. repair completed, sealed wall, added downspouts" with no mention what-so-ever about moisture....nor other walls that were painted over to hide water damage. 

Sometimes if you are renting the unit and it is not insulated properly, then you hear footsteps and conversations from next-door units, so tenants complain a lot, but there is not much you can do.Also, one time the unit above mine leaked water into my unit, and the HOA said I needed to talk to people living above mine to fix the issue and they didn't have the fund to fix the bathtub from leaking into mine, so I had to pay for the repairs.Sometimes working with HOA and is painful, but other times is easy if the unit does not have problems