This floor includes a kitchen, dining room, and living room but needs an additional bathroom to become a standalone rental unit. 

Additionally, there could be tax consequences for you, possibly losing your long term capital gains tax treatment. 

Any time I've done an addition, I had to raise the floor to match the rest of the house.There is one unethical hack I've seen for the floor issue -- calling the garage conversion a "storage conversion" (not classifying it for living purposes).

If you believe the property tax assessment is too high, you can explore the option of appealing it.

I'd plan to pay off both loans within 5-7 years with cash flow from the rental and other income and assets.I'm an accredited investor and will still have more than a year of expenses covered in liquid assets and additional funds to buy another 1-2 properties in the next 2 years, which is my goal.I don't know if I've provided enough or the right information to get some opinions if what I'm planning to do with my current house and new home purchase makes sense. 

You can read my previous forum post to explore my journey. 

So, for example, I can have separate sub accounts for each property's security deposits, CapEx and even profit in addition to my general bank account for each property.

Additionally, consider using a secure payment method for the deposit to prevent issues.

Here's an article with additional FAQs on cost segregation studies that you may find helpful.

@Zak DolakHow important is access to the additional 100k to you?