With a few tweaks to the management structure, and with new leadership, I figure we can greatly increase the revenue.

Question: why would one choose to build an ADU when existing structures sell for less than the cost of development?

@Brice Alef-Torrisi, there's lots of different ways to skin this regarding entity structure and financial account structure.

Today, companies with many structures use the word turnkey to describe their services. 

Once the disaster is over, someone from the lender will verify the structure wasnt damaged and then proceed with the funding. 

But ...The first thing I observed was the replacement cost portion of the quote, was, IMO, less than what it will actually cost to demolish the remains of the existing structure, pay for any hazardous waste removal following a catastrophic loss, and actually pay to replace the property in the event of a total loss, even though I used the quote feature to increase the replacement cost value by 20% (the maximum it would allow).

It’s worth researching to see if this might be a good fit for your situation.Lease Structure and Clauses: Work with an attorney to draft a lease with strong clauses for late fees, maintenance responsibilities, and other terms to protect your interests.Target Stable Tenant Profiles: While no tenant is risk-free, targeting tenant pools that historically have more stability (e.g., retirees, dual-income households, or tenants relocating for work) may reduce risk.Stay Up to Date on Landlord-Tenant Laws: Understanding your rights and obligations can help you navigate issues more effectively if they arise.That said, if the potential risks are keeping you up at night and the financial pressure of an eviction would be too much, selling may still be the best option for peace of mind.

I have deals needing funding and want to ensure I'm structuring them in a way that's competitive and appealing to private lenders.

Here's how they break down:Fannie Mae HomestyleMinimum Down Payment: 3%-5% (Primary Residence) & 20% Down (Investment/Second Home)Credit Score: 620Minimum Loan Amount: $50,000Maximum Loan Amount: Per County Loan LimitsOccupancy Types: Primary Residence, Second Homes, and Investment PropertiesUnit Maximum: 4 UnitsAcceptable Renovations:-Structural Improvements (e.g., new roofing, foundation repairs)-Cosmetic Enhancements (e.g., new flooring, updated bathroom/kitchen fixtures)-Energy Efficiency Upgrades (e.g., solar panels)-Accessibility Modifications (e.g., ramps, widened doorways)-Luxury Items (e.g., pool)-LandscapingNot Acceptable Renovations:-Commercial Use (e.g., turning a residential property into a commercial property)-Temporary Structures-Non-Residential Buildings (e.g., barns, stables)FHA 203(k)Minimum Down Payment: 3.5%Minimum Credit Score: 620Minimum Loan Amount: $50,000Maximum Loan Amount: $524,225Occupancy Types: Primary Residence ONLYUnit Maximum: 4 UnitsAcceptable Renovations:-Structural Improvements/Reconstruction (e.g., adding rooms, bathrooms)-Cosmetic Enhancements-Eliminate Health and Safety Hazards-Energy Efficiency Improvements-Major Landscaping (e.g., grading, tree removal, adding walkways)Non-Acceptable Renovations:-Luxury Items-Commercial Use-Temporary Structures-Non-Residential BuildingsBoth of these renovation loans are similar in many ways, but the key differences are:1.

Within each of these loan types and structures, you'll find commonalities and similar bases, but only conforming and govvy loans will have the exact same rulesets universally.