Some counties will grandfather the old setups and allow you to get a permit for repair/replacement and some won't. 

I have plans and permits, owner/builder.

I also knew that his work was limited because most side roads were posted (heavy vehicles not permitted due to frost heaves, etc.).

But at 75/25, it changes to 65/35, accounting for my extra money, but also his bonus percentage.

So at the close you come to the table with $1,250 plus some extra for interest to pay off the private money lender and the bank pays off the hard money lender.

But then if the end buyer pays off the seller's mortgage at closing, then why does it seem that you would need to be extra explicit that the end buyer is assuming the terms of the seller's mortgage if they are only paying off what's left right then and there?

Haha.I planned on remodeling all of the units anyways and replacing the roof and a few other things when the weather is better in a couple weeks, so it works out good for me if he actually does move out because I can easily rent the place out for an extra $100 a month with a tenant that actually passes a credit and background check.

@Armando Martinez , As long as you are taking title to as much investment real estate as you sell it does not matter what you do with the extra.

It means extra, unnecessary costs to you because you would have to file a tax return for each LLC which means more filing fees and more preparation fees. 

@Michael Pursell @Jonathan R McLaughlin is right about the liability, which made me think about homeowner's insurance.Be sure you talk to your insurance agent about whether an "unofficial rental unit" is covered or needs a different kind of policy.If there was some sort of claim, it wouldn't surprise me at all to see an insurance company deny the claim if it wasn't a legal, permitted ADU.