Obtaining the V.A. loan is going to allow you to put more liquid cash toward renovations. 

He purchased the home for $63,000 and put $20,000 into a light rehab.

Pros- the loan costs for this will be less, depending on their underwriting approach (creativity and aggressiveness) then they might do the first-year interest-only allowing you to rehab and put in long term financing without having to refinance. 

If your lease doesn't specify stuff like this ask your attorney if you are allowed to because I recommend specifying it one way or the other. 

There is some additional information that wasn't mentioned in your post above which sheds a different light on the situation.  1.

., lighting, HVAC, or carpeting), they can claim a deduction for the remaining undepreciated value of those items.

The house has some great pros:• Newer 2000's home with renovations in the last 4 years• Renovations include: paint, lvp, toilets, vanity, ceiling lights/fans, roof and HVAC• Tenants look like they are up keeping the house decently.

ADUs are a great idea and California (and most of the West Coast) is on the forefront of the most allowance and options for them, but I would think about your long-term value also.

You need to understand the market, advertise to buyers, show it in the best light, know what to say and what not to say, be skilled at negotiation, understand contracts, and much more.If you don't know how valuable a good agent can be, it's because you've never used one, or they made it look easy because they are skilled. 

House HackFinish the basement as a separate unit (if zoning allows) to rent out while you live there.