I'd personally be a bit more conservative with the underwriting and make sure to see what the carrying costs could potential get to especially if this is a bigger renovation and not just cosmetic. 

@Tatum Littleton this is really helpful!

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Currently I am exploring investing in new construction rentals with the goal being to better calculate cash flow at the front end with maintenance/cap ex expenses being low for a prolonged period of time and predictable.

This will affect how you market a lot.One piece of advice on what you wrote.

@Austin Tess, if you want more detailed responses you need to provide more pertinent details.

Purchase price: $307,000 Cash invested: $118,000 Purchased in January 2021, we successfully renovated this home to create a premier vacation rental property.

It also makes it harder for other operators down the road--- not your main concern but we all impact each other.What about you and your wife live in the garage unit, and rent out the house for a lot more, at least until all this permitting is figured out.

Hi BiggerPockets Community,I’m heading to The National Due Diligence Convention in Houston this weekend.  

There is almost zero chance that you bring this issue to a head and they sign a lease with a good future prospect for the tenancy.