Informative read about the high amount of ADU's being built in Los Angeles, the impacts they're having on the neighborhoods, and what local government is doing to preserve the "look and feel" of neighborhoods with the change in housing.

We have learned a ton and I want thousands of units one day but for now just trying what to do next with this one. ok so the issue is that home was built in 1932 and the heating is an issue in the winter and the heating costs are really high for the tenants.

Do they still come with high closing costs?

I applied for funding on COGO but the interest rates were to high as well as the points. 

I am looking at a new Goodman 2 ton 13.4 seer packaged unit for one side of my duplex in Chattanooga but was quoted over $7,000 which seems quite high to me from research Ive done. 

Plus with current interest rates, people with a high mortgage (eg 80% of the home's value) won't have much cash flow.

Highly recommend using leases as well as legal documents from Evict.com.

@Mark TaleonCashflow and appreciation in this environment of high interest rates are hard to achieve at the same time.

Doesn't sound like you remodeled the property to command a high ARV or the ARV's are just that low. 

Quote from @Nicholas Petrozzi: Nobody can answer that without knowing your finances, your skills, your drive for success, and 82 other factors that can't be discerned from your post.I can tell you that you shouldn't set your bar too high or make things too complicated.