During this time you are not generating any return from the money invested in the ADU.

@Sino U.I would save more money or look into a DSCR loan.Where is important.

@Mike Sferacorrect. one small tweak, if you're buying fixer, you wouldn't typically buy with a 'mortgage.' you'd use cash or a hard money loan. 

If you don’t qualify as a real estate professional or don’t have a way to use those passive losses to offset your active income, then spending the money on the study might not be worth it.

@Rajagopalarao PaidiRecognize time is also money if you are financing it and I have found without an agent will take longer to sell.Also are you local where you could manage all the showings, advertising etc?

This way it’s no up front out of pocket expense for me and they then have the extra money to spend as they need it.

But that all said there is absolutely no money in this.

instead of a lender try to find a capital partner and share the deals.. thats what I do provide money for JV's  works great its a win win.. your going to waste your time trying to find nothing down lenders.. unless you already have one that really loves you then its possible.

For example, in some cases even when the home is livable a seller might turn off utilities on a vacant house to save money.

That is not luck, that is not random, that is suicide.So conclusion,  the people you are trying to skip trace (and pay money for to skip trace) are not just "a bad " audience.They are the worst possible audience.