My goal is to have enough passive income to retire within the next 10’ years.

That means either you won't cash flow or your Return on Equity (ROE) will be terrible.Since this is your primary residence you'll be exempted from paying capital gains taxes when you sell.If you sell to your parents, it will be considered a non-arms length transaction and will get closer scrutiny.

My husband and I are looking for ways to generate passive income, so we did done some research on a garage conversion ADU. 

They analyze components such as cash flow, principal paydown, appreciation (both home and renovation), initial equity, depreciation, and interest deductions for tax savings, giving you a clear picture of individual gains and ROI over 30 years.

There was very little immigration before 2016 for a decade and workforce decreased, and since then, there is a net gain of around 1.5 million.

A recent article by BP: "Top 5 Alternative Investments for Real Estate Investors in 2024," which was sponsored by "atminvestors.com," listed the #1 Passive Investment opportunity as ATM investing (of course).

Both her and my 9 year old son are passive investors in our long-term rentals.

The other thing is that if the house is really appreciating rapidly, if you lived there 2 years and sell within 5 you get to keep 250k of the capital gains, which probably makes better sense than keeping long term as a rental. 

Plus looking to sell a property for her with over 100K equity after commissions, no capital gains tax .That new car smell with 6 miles.

It's finally a passive operation for me.