Typically these will be loans to a business entity (LLC) and will be based off of appraised value instead of purchase price.

You need to make sure to frame your offer from the perspective of an appraiser and supply supporting information to justify a lower offer than asking.Cash doesn’t mean much in this market unless they are highly motivated and need to close quickly or have multiple offers with contingencies.

We would like to avoid as much as possible such as closing costs, appraisals, etc. 

Some lenders can do drive by appraisals if there's no interior access and some can work with the property even if there's someone living inside.

Has anyone had experience with how ADUs are appraised? 

A non-exhaustive list of closing costs includes loan application fees, points, prepaid homeowners' insurance, appraisal fees, inspection fees, transfer taxes, escrow fees, attorney fees, recording fees, prepaid interest, prepaid private mortgage insurance, title insurance, and title search costs.Hope that helps.

Lastly, call property managers, appraisers, inspectors, etc to find out who is selling. 

My hope is after renovation the house would be appraised for more.

The property would need to appraise at $420k for you to accomplish what your are trying to do. 

Purchase price 130,000.20% down payment 26,000Closing cost 3,000Property taxes 2500 Current appraisal closer to around 180,000 when looking at comparable single family 2/1 houses Repairs/renovations 15,000Estimated rental price 1400After running it through various calculators, it seems like the rental makes sense with these numbers, but let me know what you guys think.