The other issue is the type of tenant base you probably have is very intensive to manage.If you are local there are many things to look at but these are key.Anytime you have a run down building you have to ask yourself these questions: Is it a bad area, bad tenant base, inferior management, a mix of a couple,or all?

Making it go up stairs, down stairs, stand on 2 wheels for added height...But instead of improving an inferior system, they should be looking into exoskeletons,  or better yet find a cure for paraplegia.Same with DMM.

Have experience with a lot of it over the last 7-8 years, when it first came onto the market there were lots of issues with inferior product and it 'cupping'.

Buyers can be lured in by higher cap rates but then discover the buildings are NN instead of NNN and have cheap construction that makes re-tenanting hard to do because of inferior locations.Occasionally one  can find an all brick or block type store in a strong suburban location for low rents that are under market.

When using your credit to secure a loan for the ADU addition, the terms are typically far inferior to acquisition rates. 

Since I don’t have $50 million to invest, I would be stuck with the “ imitators”, the managers with inferior track records, the funds with higher fees, the investments without quality deal flow, etc.  

As far a buy and hold goes, down payments are the stopping point.You can only buy (and hold) what you have a down payment for.Some people (when the market is right for it) will flip.Those who know the rules of this game, and are hammer swinger types may have an advantage in this area vs someone who has no sawdust in their blood.If you have no idea of the difference between a Radial Arm Saw and a Chop Saw, or what exactly to use to caulk a wet location, your communication with your sub-contractors might not be very clear all of the time, resulting in inferior (to what you wanted) work, or costly re-dos.In my opinion flipping is more like a job, where you can either live off the money, or use it to buy and hold income producing real estate for your portfolio.Just my 2 cents. 

Don't forget to include the cost of your own time (it's not free) and that you may end up with an inferior product in the end.

(I am a real estate tile examiner) You need to look over these documents to determine the subordination and the lien priory to make the determination who holds lien priority and which inferior liens are wiped out. 

From what I've gathered you're building the base (foundation, plumbing, electrical) just to install an inferior house on top.