Do you have a lease I could look at, if you feel comfortable sharing. 

The seller will always retain the equity and would receive annual distributions - and could structure the agreement with an exit strategy that makes them comfortable. 

While great for cashflow, may limit your exit stratgy.Also, How comfortable are you with the offer as well as the overall numbers on whether this will or will not cash flow? 

Is it as simple as getting the site designed and engineered for the footprint, cleared and graded (all of which I am comfortable with), and then hiring a GC to build the building?

If you are comfortable with the rezone process I would look at this, and perhaps you can still ADU in future after the rezone.

It will include a compact bathroom, a tiny kitchen area, and a heater—just the essentials to make it comfortable for someone to stay in.

However, consider STR seasonality, local regulations, and management demands, and ensure your equity loan and new primary residence costs fit comfortably within your budget.

Smart move. documentation is your best friend :)  Stay safe out there.

Meeting the material participation hours is absolutely doable, even with a property manager, as long as you stay actively involved in key tasks like marketing, bookings, and bookkeeping.

Once I get to a point that it is making enough per month that I feel comfortable taking money out of the business that would be when I get to the point that it is worth have a specialist assist me in all deductions, credits, and future items that will help me to transfer from a W2 to working for myself fully.