The rental (SF) is paid off i.e.

Was it 50% off, 60%, or even 75%?

You are a high w2 earner, The house is worth 110k today, you are buying from your grandma for 60k in exchange for free rent for life, upside ARV of 200k.The costs of owning the house will help provide tax relief on your high w2 earnings, you are buying a great chunk of equity that will pay off in the future, and you and your grandma are doing each other solids. 

Found this off-market deal through a local wholesaler specializing in distressed properties.

Antelope Ridge off Powers and Barnes.

I don't think anything is 100% sure, and all the documents all the syndicators have you sign will melt your face off.

Mortgage balances go down and eventually get paid off. 

And as investors we should know this, but always anticipate higher costs and longer waits.EXAMPLE Breakdown of Costs:Plan Purchase: $1,500Permitting Fees: $2,500-7,500Site Preparation (grading, utilities, foundation): $20,000–$30,000ADUs require separate utility connections for water, electricity, and sewer but you can tap into existing utilities at the primary houseIn Raleigh you CANNOT split lots fee simple, so setting up completely separate utilities would not allow you to section off the ADU as of nowYour ADU must be on a permanent foundation (no wheels, no ability to move the structure)Construction (labor and materials): $100,000–$150,000Low-grade: $150–$180/sq ft averageMid-grade: $180–$220/sq ft averageHigh-end: $220–$250/sq ft averageLandscaping/Finishing Touches: $5,000Total Estimated Cost: $125,000–$200,000You could easily spend $200k+ with super end high finishes, custom designs, complicated sitework, adding a second story or more sqft, etc.

It can run long, it can run expensive, it can be done poorly, it can not be done at all, you can be ripped off. 

Tons of double sided tape used which results in a fair amount of extra effort to restore (most cases paint comes right off the wall requiring patching sanding etc, some cases Good-off was effective.