Wells Fargo gave a HELOC for 30K.  

I don't love taking HELOCS to burn, but if you have 500k in equity, you can safely use up to 250k to buy another property and probably get one that cash flows well by not living there.

Just up your insurance to an amount that makes you feel comfortable.Do recommend getting a HELOC on the house BEFORE you move, so you can tap the equity in case of EMERGENCY only:)

Given the income and lack of debt, I would probably pull a HELOC on the current primary, but the house you want and do what you need to make it livable. 

@Katie Camargo I would consider: HELOC or Cash-Out Refinance:Post-closing, the higher appraisal gives you the potential to tap into the equity via a HELOC (Home Equity Line of Credit) or a cash-out refinance.

The interest rate on a HELOC is usually higher than a normal 1st lien mortgage, but I am seeing some cases where HELOCs are in the 6's and 7's (where credit score is high and LTV is 65% or lower), which make them pretty comparable. 

I'd hold on to your home as a rental and pull a HELOC before you move out.

private lending them cash out refi to HELOC How did you add value to the deal?

A HELOC is not a great tool to use as a down payment on a long term hold, it is best used in quick turnaround scenarios.

Make sure you know the value the ADU will add to the property before building the ADU. 2) the financing on an ADU is typically far worse than for initial investment property acquisition or is often not leveraged by the ADU (HELOC, cash out refi, etc).