Assuming they don't show up to court or contest it which I don't suspect they will since they've had the opportunity over the past 4 years to do so.

I suspect that if I went back to my original model of the deal, we barely broke even if we moved out and it turned into a rental. 

If your tenants can't flush, they'll still try and you'll get the call to clean up the mess (ask me how I know that).Old buildings are always suspect for mold, asbestos and lead.

I suspect the reason for this is that the majority of travelers are couples.

Unfortunately I suspect you are going to need a lawyer. 

I suspect/speculate it is non-trivial to address as letting it sit empty in this market is costly.If it could have been addressed easily and reasonable cost, the new owners likely would have addressed the issues and the units would not be sitting empty.The standard offer contract in CA includes disclosures. 

However, if the ADU can be built at an all in cost of $20k, then it likely is a value add as I suspect an appraiser will give at least $20k of value and hopefully quite a bit more  If you can successfully convert a garage to a legal permitted ADU for $20k, I think you have found a niche that leverages your existing knowledge and skills and that you could do very well with this plan.  

I suspect we'll see that happen to many in the coming years as things shake out.There are opportunities to invest with little money down but those opportunities are few and far between and should only be used if you know what you are doing and can handle the increased risk.

you are in Washington, so I suspect the tenant has more rights than you expect. 

Some comments:I suspect you initial cash flow estimate is more likely to be too optimistic than too pessimistic.