I like the idea of having one of my biggest "expenses" i.e. my debt service fixed for the full loan period, especially with risk of interest rates being on the rise.  

How much debt do they have? 

I use a small buffer to eliminate the need to bill back. 

I love real estate and want to jump in head first since this is the first time everything is paid off no debt except for this house cash on hand (50-60k to invest) ....

Factor in any debt on the property, utilities, furnishings, etc.

IMO, ultimately the metric that is most important is IRR, but that requires more speculation (essentially it's COCR, plus debt pay down, appreciation, etc).

I do believe your FICO must be a 580 or greater, and sufficient debt to income.

Prefab ADUs come in around $100k but I'm hesitant to take on a lot more debt.

It is this loan that provides you liquidity, and unlike a 1031 exchange, there are no rules on the timing of subsequent purchase, nor do you have to apply all the cash to the replacement property or maintain at least as much debt on it as you had on the relinquished property.

Little houses, especially with debt, nah.