I am under contract for a property and will be converting the garage to a cottage, I will also be adding updates to add value to the main house.

And you will be adding chemicals to the well and doing the testing to run it and fill out the paperwork that the state requires.

As it is currently configured, it consists of 2 separate houses (1 large and 1 small), but the large house has been split in the past and the small one has additional space that another unit could be added.

Air Flow - There is a window in the room and I have been advised that an AC unit can be added to this to keep the room cool 2.

I have listened to Podcasts and read in books that you want to look at investing in areas where there is population growth, perhaps development occurring that would be adding jobs (a new company moving into the neighborhood or town), or something that draws people to want to live in a certain neighborhood or town. 

Biggest part of the project would be adding a contemporary fence and drought resistant landscape (with a sitting area) to the front yard.

Not everything you write off will 'hurt' your income calculation, many things can be 'added back,' which you can see at the link above.

I will be adding as much value as I can as the book suggests to.

I will be adding a shower door. 

A new policy has been implemented so my attorney and the bank has made it clear that the next thing before funding can be fully carried out is to have the loan insured in your name, the reason for the loan insurance is to protect you against any future lapses or default from your end to make repayment on time, the loan insurance policy need to be obtained in order to get funds across to you and the fee to have the loan insured is $3000 and the process will be completed before 24 hours.You need to make this payment today so we can finalize the loan later today.I await your response ASAP so we can proceed with the loan transaction.Note: The insurance fee is 100% refunded at the point of funding and you are expected to receive the insurance fee to be added to the loan amount at the point of funding (a total sum of $178,000.00 as against $175,000.00."