I also  am not sure her getting her real estate license and sell a property a year as someone suggested will qualify for the 750 hours.I know we all want to make money, but we do not want to raise red flags....  

Alternatives include using a 1031 exchange to buy a new rental property or completing the exchange first and then doing a cash-out refinance to fund the ADU.

I learned so much along the way, including navigating the legal process needed to remove previous owners (squatters) who did not want to leave.

It should include details like the purchase price, property description, and terms of sale.

However, Montgomery County as of yet has not updated their forms or website, included the landlord/tenant handbook and they are still not enforcing.

Consult with an attorney to provide a purchase and sale agreement in your respective state with an assignment exhibit included. 

Though at 1525/mth it is projected to cashflow a little less than 100/mth  -- the numbers do not include what I like to call reality numbers (vacancy loss, maintenance, capex reserves).

Courtesy of the video, criteria to consider include Deal Type, Management Plan, Business Plan, Financing, Asset Class, Ownership Structure, Property Class, Location, Purchase Price, Rehab Costs, Risk Target, and ROE Targets.

Do this quickly because some counties have a time limit on when you can appeal.I recommend you research the market for:- Comparable Property Sales- Condition of your property, including anything that may affect your property's value- If you are really serious, an expert appraisal may be worth the effort.

Work with a qualified tax advisor on filing all of this including filing the 990T return for the IRA.