Required good credit, adequate reserves, full doc commercial loan with a personal guarantee.  

I have excellent credit and good paying job approval will not be a problem. 

I've owned the house for few years and have spent a lot of time trying to design an addition to add value to the property, but the current floor plan is really not conducive to realizing a return on that investment (tiny living room, low ceiling basement, poorly placed basement stairs, etc.). 

I currently have a homeowners plan with Allstate and plan on asking them if they have something like a short term rental rider plan that I can add in addition to my current plan.

I recommend using a lender that non-reporting to personal credit and can close under the LLC to keep your DTI lower and overall your personal liability profile more bankable.

If you have extra money that you haven't earmarked for additional RE I would do TSM index funds for a truly passive investment. 

In addition to cheaper prices through Minoan, they set up a site for your property with affiliate links in it. 

I won't go into all the details, but there always ends up being a significant problem in the documents I get or don't get, in negotiations, etc, and the trigger never gets pulled.For a variety reasons in addition to the above, including my wife's encouragement, I've decided to take a serious look at going the real estate route instead.

Additionally, the funds they deposit might be significantly higher, and harder to recoup, hence they have the ability to close on a deal the lock up if they need to.Thats a good point.

I recently completed one on a multifamily property and found it to be a cost-effective approach.That said, there are a couple of additional factors to consider beyond the code differences between a garage conversion and new construction:Coastal Overlay Zones – If your property is in a coastal overlay, building a ground-up ADU may require Coastal Commission review, which can add time and complexity to the process.