Best approach is to have your "team" set, before going out to secure properties. 

If they have a good interest rate it might be worth looking to see if you could assume their loan to take advantage of the lower rate.  

In San Diego at the current rates for a purchase loan (which has better rates than an ADU additions) at high LTV, I show 1% does not cash flow on a sustained basis.  

This is really a lot of information packed into a densely worded post.Yes, you can use loan proceeds to buy out another member, but it doesn't seem like you'll have enough to buy out and develop.

If it is someone you know you can give them a straight return as if its a loan - can provide a lower interest rate to provide upside - it really depends on the lender and what are they concerned with and what is their risk profile. 

My belief is that you will be challenged to realize a 10% savings loan n your first effort and there is some chance it will cost more than if you used a GC.  

If you Bank/Lender does not allow it you can refinace the mortgage into a DSCR or true Portfolio loan program. 

The cause of the 2008-2010 Great Recession was bad real estate loans - if you could fog  a mirror, you could get a mortgage!

So, I guess I will hope social security pays something in 20 years and the stock market is still there when I grow old.BTW, I am an experienced investor, I know I can dump everything in the stock market but I am hesitant to do that.

However, if I don’t secure an eviction order within the next two months, I’ll send him your message.