Hello Dana, For that purchase price in Brooklyn, NY, you could be looking at considerable unknown expenses at this point.If the property is occupied, you'll have to factor in attorney fees and holding costs while you wait to gain access to the property.Furthermore, you could be facing additional costs related to title issues: open permits, violations, liens, judgements, etc.

Additional Interest...

Too risky for us.Regarding additional guest packages, you can easily change your tax situation by offering what the IRS calls "significant services".

But possibly do a prom note for an additional 50k after about a year by pulling out equity.

Updated the kitchen, bathroom, and pulled permits to expand an additional bathroom/walk in closet.

They are not experienced real estate investors, they are retired and looking to create additional income. 

You will never get that back in terms of additional cash flow

Since they are considering renting their properties out, sell them on the concept of getting consistent cashflow from you - without the hassles of being a landlord.You will then need to make sure you can make those monthly payments EVERY month in addition to do remodels.

The big issue is building a single small residential unit is the most expensive residential development.Here is a list of why adding a single ADU in single family zoned areas in my CA market is typically a poor RE investment:1) The value added by the ADU addition is often significantly less than the cost of adding the ADU.

I'll provide some additional facts based on your response, but don't want this thread to spiral into a back and forth dialogue.