Question: why would one choose to build an ADU when existing structures sell for less than the cost of development?

I'm totally good with some sweat equity but I'm not in a position to do Roof, siding, structural repairs and such.

If seller financing is the route you go, you might consider getting creative with the structure to make it work for both parties.

Start by talking to a cross-border CPA and attorney to handle taxes and legal structures properly.

Properties are sitting on market for a bit longer now that supply is slowly creeping back up. 50 days isn't too terrible compared to the greater PHX area. 

This will not qualify for 1031 Exchange treatment under the present structure and "use." 

If you are priced well and the condition is great barring there is not a ton of supply, then you will sell quickly!  

I have NOT placed much research into it but from what I have read their fee structure is expensive. 

My understanding is that the ballpark standard of "unless it would be outrageously tough" (something along those lines) is what applies if you're doing a rehab, seeking new permits, doing structural changes anyways, and things of that nature.For existing pre-ADA structures, my understanding is that the standard is more along the lines of "if it can be easily/cheaply done, you have to do it."

You can find some absolute MTR gems near smaller hospitals that aren't so obvious but ultimately, housing supply in the area is something I'd say is more important coupled with your amenities.