Overall, this deal has too many bugs.

However to get those rents the homes had full renovations with central air, new plumbing, electric kitchens and bathrooms.

To be honest, I am not sure of its zoning, but I believe it was originally built as 2 units, and it has 2 gas and 2 electric meters.

Tenants pay electricity but water is free and water bill averages $500 a month. 

I am an electrical contractor and a realtor.  

What would a total electrical job cost for a house?

From what I've read, the summers are only going to intensify and Lake Mead might soon hit deadpool, where the Hoover dam won't be able to generate enough electricity due to lack of water. 

As @Aaron Mazzrillo mentioned, The challenge tends to be in dealing with sewer electric and zoning etc. tiny houses generally fall under RV laws, and in most communities it isn't technically legal to have someone live in an RV in your back yard. 

I will be having an electrician doing some electrical work as well. 

Why get into electrical and cutting into the roof when it won't affect your sale.