I guess they haven't figured out their exit strategy? 

If not, is getting am umbrella insurance policy on the DADU my only liability protection option and is it a good protection strategy? 

You want to ensure that your lender is doing their upfront due diligence on the deal, has programs to get the deal done if the final numbers come in different(low DSCR requirements, favorable rent guidelines, etc), and is offering you excellent customer service.

@Jen Breysler it wouldn't hurt to talk to a CPA that specializes in real estate so they can provide you with the best strategy based on your specific situation.

You're looking at different strategies but haven't really picked one.

Less revenue swings with residential and less impact, than with commercial customer change overs. 

But your strategy to break out of that is like seven different strategies ...

I secured a low mortgage interest rate during COVID, and hoping experts in this forum could recommend VA Loan business strategies as I would like to convert our permanent home into rental property and transition into another home.1. 

While I am capable of holding onto a property like this, I fear for the newbies who have very real risks of not being able to hold onto the property long enough to get out from underwater.Because the buyer of this property is likely to be inexperienced and not know or think through all of the items discussed here, this strategy may put you in a ridiculous position of power for at least the next decade over the buyer. 

What strategies would you recommend to enforce a stricter garbage policy?