We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

Are you looking to pay off the hard money loan, fund another investment, or cover property improvements?

There are companies such as Cover that offers a full service ADU deliverable from design through construction completion.

I think Peter covered the best course of action.

Can try to reposition to Class B, but neighborhood may impede these efforts.Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years.

So, he's claiming the home warranty won't cover... fine, what's the repair cost?  

There is way more things that can be covered and any attorney can correct me on here, but these are the ways we understand how to make it work.

Before you close, can the rent from your buddy and the midterm tenant cover your mortgage, taxes, insurance, plus a bit extra?

This is the percentage of costs (purchase and rehab) covered by the loan.

I would be looking to use hard money to cover the costs of renovations.