As for building out your current garage, or completely tearing it down and building a two story rental unit - this decision has to do with your appetite for risk and how much you are willing to invest in the property. 

Changing floor plans or taking on numerous capx upgrades to purge the conditions might be an excessive start until later: zoning, permits, and 2nd egresses come to mind unless a basement unit can be added. 

However, we have found ourselves in an amazing opportunity to get into real estate development due to churches having excess land often in great locations that would otherwise be unavailable to the average developer.

I don't believe in excessive leverage.

My risk appetite is similar to yours in that I want my empire to be financially strong, and not awash indebtedness.  

In Oregon there is no tax sale... if the property taxs are not paid in 3 years the property Escheats to the state.. taken into state inventory then sold some time in the future as state excess properties.. these are FAR and few between..

Whether you work 20 hours or 50 behind the RE desk, you'll be getting that "in" and whetting your appetite. 

So with my free time and excess of money I can and would do more to help that hospital. 

However, if you’re talking about your home and NOT an investment property, the emotional well being of paying down or even fully paying off your mortgage may be far in excess of any benefit of investing the money instead. 

The crash of 2008 happened as a flash flood, but the excesses were bottle necked over a long period of fiscal irresponsibility.