That is a lot of negative cash flow.Adding the ADU will have cost and effort but should improve the negative.  

After researching, we found that converting a single-family home into a duplex could cost around $200-300k.

It cost us $3,000 to demo the shower and retile it.

Shawn - I would suggest you develop a pro forma based on the stabilized state of the property to understand if it cash flows once all units are occupied being sure to include all reasonable revenue assumptions (rents, vacancy factor, etc..) as well as expenses (debt payments, maintenance, utilities, property management, taxes, insurance, turnover costs, etc..)

Right now we pay our cleaner $300 per turn but charge guests $250.The costs of having a STR about an hour outside of town.

Pushes the cost of damage protection insurance onto the hosts and guests.

I will recover this cost of new heating equipment in 2 years through the savings of what I paid this year for heating oil.

First, determine what your lender offers in terms of Loan-to-Cost (LTC) for acquisitions and the maximum Loan-to-Value (LTV) for a seasoned cash-out refinance.

Water damage/mold/ect. is much more costly to repair than to prevent.3.

Property Details: SFH 6 beds 2 Bath 2016 sqft - Rented by the room.Purchase: 340,000Amount Financed: 272,000Down Payment: 20% (68,000)Purchase Costs: 12,777Loan Type: 30 yearInterest Rate: 8.75%Rents: 3,300**********************Investment Returns - Year 1Cap Rate (purchase) 8%Cap Rate (Market Value) 7.1%COC 1.8%Return on Equity 1.3%Return on Investment 25.1%Internal Rate of Return 25.1%