@Michael Pursell @Jonathan R McLaughlin is right about the liability, which made me think about homeowner's insurance.Be sure you talk to your insurance agent about whether an "unofficial rental unit" is covered or needs a different kind of policy.If there was some sort of claim, it wouldn't surprise me at all to see an insurance company deny the claim if it wasn't a legal, permitted ADU.

I usually just adjust my offer accordingly to cover the expected costs.

@Pandu Chimata There are a few other things that the Underwriter will require in order for you to get the Primary residence (Owner Occupant) loan rate.1) You will be required to sign an Owner Occupant affidavit, This document basically covers you legally stating you will occupy the property within 60 days of closing escrow, and you will occupy the property for a minimum of 12 consecutive months from escrow date, and you will not rent, lease, or sub-lease the property within the first 12 months from the closing escrow date.2) The other thing that often gets asked is, How far away from the current primary residence is the new property?

The game played from Far Rockaway to College Point, from LIC to Douglaston is pretty much the same:  anticipating appreciation.Sometimes you can 'force' some appreciation by fixing up some units, but the rents WILL NOT cover your expenses.  

My concern is covering the turnover time, and I am trying to figure out how I can get that covered in the new short-term lease extension. 

How many units does it cover?

They accepted but on the condition that we buy the house as is and that we cover any difference if the appraisal came under $458,000.

However, I'm assuming this entails you managing the property and you'd need a few more units rented to cover the property management costs. 

Somebody correct me if I am wrong here, but the idea is that you are buying enough to cover the amount of damage you might incur. 

And yes, insurance will cover some of that but you'll have a deductible and it will cause your rates to go up.But probably the worst thing with trees is underground.