For the most part, converting a garage into a studio ADU is costing in the range of $150K. 2.

Conflicted on whether I should sit down with a lawyer to draft a lease, or if Zillow's basic lease is sufficient? 

Predominate SP range is $180k-$240k with not a lot of distressed sales.

And it was a low value asset some where in the 40k range. 

These were each new construction homes in the $300K range in growing markets (I'm using general numbers for illustration purposes).

Doing a refi now would move me from a 4.5% interest rate to somewhere in the high 7% to 8% range, so I am thinking of potentially selling.

So you can educate yourself to the specific neighborhood and home in the price range you are looking for.

I am writing my business plan and I am trying to figure out how I will include in the renovation costs from a percentage of the purchase priceThis is really not possible, except in a very broad range.

People are always looking for units in the 500 to 550 range, so you're right on track with that.  

Current market estimates, and ones that I have received myself, have the installation of a new ATS ranging from $45,000 (on the low end with perfect property conditions) to $80,000 or more.