Though I expect that to increase in the future when more ADUs are constructed.

The overall LTV (including all 3 mortgages) will be key and your selling point will need to be that the 2nd mortgage ($8k) will burn off in 2.5 years (based on your surprise that it was even out there, I'd recommend that you follow up in 2.5 years and ensure that it's been satisified, so that it doesn't surprise you again in the future).Does the $8k grant vest over the 5 years? 

A project like that will probably take 6 months to 1 year, so what's your expectation for future rents?

Non of us, no matter how experienced, have a crystal ball that we can look into and see the future outcome of an investment.

Should i ask the downstairs tenant for the footage to have as proof to have and document for anything in the future? 

Everything worked out and see DSCRs in the future.

You might also want to look into supplemental insurance for future stays, like Proper Insurance or Safely, to cover situations where Airbnb’s support falls short.I'd be happy to help more.

So for now Im staying but will be looking at something else in the near future. 

- Rents, Vacancy & Maintenance metrics, future growth, etc.2) Your analysis?

Given your financial constraints and the property's ineligibility for historic tax credits, this approach allows for reinvestment into assets more aligned with retirement account rules.For future real estate investments, you don't need an LLC for tax reasons.