Some of my costs above are optional but not all.

Rates may still be high, but sometimes they’re more flexible with repayment options than a mortgage refi.Family Loan Structure: Since you have an existing interest-free loan from family, you could talk to them about restructuring or even adding onto it, if they’re open to it.

My goal is reviewing retirement options. 

@Roger CreekmoreMini splits sound like the best option from the cheap seats. 

@Rafael Ro Why are your numbers different for options #1 and #2?

I would check and see how many 1 bed and 2 bed options there are and what they are priced at because most folks will prefer the full place to themselves so rooming 2 people together could make getting bookings a bit more difficult (not always the case but something to consider)

Consider house hacking by purchasing a multi-family property with an FHA loan, or explore creative financing options like seller financing or partnering with private lenders.

If they do need financing, then speak with your lender about their new build financing options. 

Example: you can option to have a fireplace with two windows on either side.

I would start there and think of anything that I could do to stay in the house for a while as it sounds like you would be losing a bit of money with the other options.