Regarding financing, do you have any advice on how to proceed?

We have been doing it based on square feet, but the ADU consumes way less water than what that would actually calculate to (the main house has a backyard, more people, etc).

So I would just proceed with caution if you are looking to buy a condo with an HOA!

I would not do a summary eviction proceeding in NY without an attorney. 

Upon sale, gains are taxed as long-term capital gains, calculated as the sale proceeds minus your adjusted basis (initial investment reduced by any return of capital).

Quote from @Jaycee Greene: it all depends on the credit scores, but consumer mortgages tend to have lower interest rates than commercial loans.

Continuous participation.This is great if you are talking about an SMB with effectively connected Real Estate.Note rental activity is considered passive unless you meet the RE Pro threshold of 750 hours and more than 1/2 your time.This is the conundrum for passive real estate investors.If you have a full-time job or a large, time-consuming business it can be difficult or impossible to qualify.A huge loss from depreciation if you have one LP investment isn’t going to do anything for you.

Consumer Financial Protection Bureau (CFPB): - https://www.consumerfinance.gov/complaint/4.

The property is undeveloped, and I’m in need of a loan to proceed.

(I'm sure both the average consumer AND the average entrepreneur would disagree, of course, but hey - y'all're the guys with the fancy, big money jobs and the college degrees - what do I know ...)