(I've done main social media platforms,MLS,all online listing services, open houses, following up with all realtors that show...). 

First you need to consider if you are an investor or part of the social support system. 

Forecast of 7.7% is just a forecast, market conditions change and nothing is set in stone. 

Lee asked a very important question.What condition are the interiors in and what zip code?

Do you know what rents go for in that area and in the condition the property is in can you raise the rents if they are under market?

I would say being more proactive, whether it is stating the house must stay in a 'habitable' condition, or with regards to walkthroughs and repairs is mandatory.Now as far as moving forward, I'd agree that you would likely want to keep the tenant, BUT and a big but you start to advise them that some changes with regard to the cleanliness and repairs of the property are coming. 

Adv. is stable income without the headache of constantly marketing it as B&B. and I post on craiglist, Zillow...social media...tell everyone you know.

Supply/demand drives prices, not property condition or anything else.

@Alexander Nason when @Chris Mason says "a tad higher" regarding the standards for an FHA property, what he's saying is that an FHA loan requires the property be in livable condition PRIOR to closing on it (unless you do a 203k loan) so there is no way that you'd be able to close on a property needing any major work. 

As for building out the ADU, the cost would be dependent on the site conditions. $100k is only for the unit itself, there's additional costs for permits, plans, utilties, foundation, etc.. the list goes on.