I'm considering converting the shed into a DADU to maximize the use of the space and earn some extra income. 

Quote from @Conrad Tillman: Quote from @Jay Hinrichs: LOL  its kind of like 50 ways to leave your lover.And its very much dependent on your jurisdiction. however I will list the stuff I have gone through the last decade or so through about 200 new builds in 4 markets.1. material price fluctuations. rarely down almost always up pretty much annually. 2. as we all know labor  scarce  and or unqualified and do poor work..

I'm a product of BP through and through, was on these forums figuring out how to house hack after we already were in contract on a duplex, all the way through making it the foundation of my current business. 

If everything goes right I will be able to refinance and will have created 25% equity, or I may end up having to bring $10-20k to the refinance to get the 75% LTV depending on the appraisal, but even if that's the case it's still a great deal.

Though USLI, one of the biggest umbrella policy providers, dropped my max coverage to $1M because I had pools.

@Joy McQueary of course I am partial to the KC metro.

Quote from @Peter Thielemann: Thank you Jonathan, I have a family member that has several successful rental properties and is walking me through the process.

“How come my tenant was awarded my property as compensation after they were injured falling out of a 20 foot tree I told them they had to trim?”

This is where your team comes in real handy. 

Several banks offer soft inquiry options, I'd try those out prior to risking the HP.