The question: A commerical property in a highly desireable location which could fetch $6+ million and generates about $400k after expenses became available and I'd like to add to our portfolio instead of doing a 1031.

Based on my experience of running properties, even if the build were to cost you as much as $600k but you could generate $125k/year, you'd be very happy with that investment. 

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

Your journey into short-term rentals sounds like an exciting shift—I can feel your energy for taking on a new challenge. 

I generated the list by combining Zillow's smooth, seasonally adjusted home value dataset (ZHVI) with their rent index (ZORI) for metro areas.

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

There will also be many homeowners who have had the properties in the family through generations and own free and clear but now still need to obtain a construction loan to rebuild. 

Still trying to get through some sales to generate cash.

I had no money to put down on any properties, so I learned (a lot) and put in a lot of hard work and effort to get some properties under contract.Initially, I had no clue what I was doing, but I had the help of some people (and I appreciated that)I made mistakes that cost me around $30k (lost a deal due to my ignorance regarding title and escrow)The good news with wholesaling is that it doesn't take a lot of capital upfront, and you can start talking to sellers and learn about the industry in general.The other good news is that you can without a doubt generate revenue quickly if you do things correctly (having a good TC / title / escrow connection that keeps deals moving on the backend)That said, there are a few points that I've come to live by:1.

Convince yourself that there's a better than average chance that you will lose, and if you can live with the time, energy and money spent if you do.