I know it has been costly to replace/repair the damage done especially with the property being vacant and a monthly mortgage payment due as well without any rental income coming in.Any advice is greatly appreciated.

Is it the entire system that needs to be replaced? 

Secondly, if the appraised value is less than replacement cost, ADU does not make sense for a value add.

Hang your new fixtures and replace the knobs and pulls.

I used a business credit card to pay for a new roof and will use it going forward for all repairs and replacements of items. 

My hunch is you won’t find a replacement investment in this market that is much better than what you have, especially if you are looking to redeploy $500k+ equity.

I am having a sewer line repair company come out and give estimate to repair vs replace. 

I'd rather replace a $1200 water heater for a $2000 rent than $800 rent.

Only those that legally existed prior to new Codes can be maintained, replaced, etc.

Hey Ram, I'd agree with David, I think you'd like to include a few more expenses like ongoing repairs, trash and replacement costs, plus add in something for vacancy and bad debt, plus add in closing costs.