Owner is willing to assist with financing property is free and clear.

Based on a rough analysis for a project timeline, I believe the total project can be completed in 5-7 months with the team I have available if we get involved in completing the work on the project.Deal Analysis as a whole - Actual Costs may be slightly different but estimates should be fairly closePost Construction Estimated Market Value - Lot 1: $379,000 Lot 2: $307,000 Total Estimated Market Value $686,000+- $102,000 - Cost to payoff HML & Previous Builder- $154,800 - Estimated Cost to complete House #1- $170,370 - Estimated Cost to complete House #2: Includes New Well/Septic $7500, Impact Fees $2100, Permits $1000= $427,170 - Estimated Cost to Payoff HML, Complete Construction on House #1, and Construct House #2+ $686,000 - Total Future Market Value- $20,580 - 3% Buyer Agent commissions as the current owner(Listing Agent) will be listing these properties without compensation- $2,538 - Real Estate Transfer Taxes- $1,500 - Settlement Costs Paid at Closing______________________________________________ $234,212- $27,900 - Payment to Seller for Down Payment made by seller to HML @ Origination (For her to break even)= $206,312 - Potential Return before any Interest/Fees/Taxes/EtcI've spoken to a few HM Lenders and ran rough numbers by them.

If FICO was 720/ non owner/ a purchase/SFR/ with 20% down rates are around 8 with 8.344 APR 30 year fixed today (there are points always).

It wasn't until the new owner observed the internet provider walking through the school property that they learned about the lease. 

I can say that in my home state of NH (and many states have similar provisions), that if the beneficial owner of the property remains the same (In NH this means the partners are the same), then there is no real estate transfer tax.Based on the high level facts you provided, I would consider a structure like the below. 

(And owner occupants, STR and MTR operators can pay more than LTR landlords.) 

There is no fixed return on this model because they are part owner of the asset.

Does the ADU have to be owner-occupied? 

.- There are also a couple pet goats in a fenced area haha

There are some vacant buildings and lots that could be developed but sometimes the old owners hold onto those until they get top dollar and you have to have a plan to turn it around.