Hi Richard,Since you just purchased the property with cash you can do what is called delayed financing.

No need to take huge risk for minimal reward.

the tenants if they seek legal advice would be told that they can delay and possibly prevent the ADU construction.

Your goal is to minimize how crappy the place will be at move out....get that dealt with and worry about showing it after that

In order to minimize this IRS audit risk, be careful choosing the line on which you report interest.

That has been fixed, and the damage is very minimal. 

It's crucial to note that this does not mean the buyer assumes the loan; the original loan terms and obligations remain with the seller, which includes the debt remaining in their name.The bank's involvement is minimal in the sense that the loan is not officially transferred.

Density is your friend, but seek out how to best do it to create a desirable place, minimize you utility/road costs, and retain value throughout the development stages (if phased).  

The goal is to maximize the income while minimizing the outflow. 

Please keep in mind when you do identify a lender that will take on vacant land- they will price the deal at a higher interest rate and will keep a low LTV to minimize their risk.