I got access to airdna data in that area and can confirm what you are looking at.

Pros/Cons:    - do you need to make structural changes to meet the ADA, zoning, or fire code for the new use ( ie ramps, wider doorways, accessible bathrooms, etc 

We have a single-family long-term rental in Port Charlotte that we'd like to keep the current mortgage rate, but we do have some equity we'd like to have access to. 

The issue you are trying to solve is getting the cash in hand to purchase the new home, potentially looking at a financial product to access the equity in the property?

My brother looked at about 50 houses and they all had some form of lack of permitting, back taxes, no legal road access, etc.2.  

Unlike traditional real estate notes is something that is easy to do from afar since you do not get access to the interior anyways so there is nothing you can physically inspect.You are correct that you will get $500-$600 a month in payments but also recognize its taxed at ordinary rates... 

Or 2 baths and a powder room accessible from the common area in order to make the living room/kitchen larger?

What this thread has revealed to me is that I've been omitting an important number, the mark-up on maintenance, which isn't readily advertised on Property Manager's sites, but it can be just as large if not larger than the monthly fee.   

Some counterpoints:- The $250K in real estate is not “locked up” and can be accessed via HELOC or sale.

Todd,A Reverse Mortgage or HECM loan is an Agency backed mortgage that allows you to access a portion of your equity with no payment required, the interest you're not paying gets added to the loan.