My goal was to eliminate my largest expense.How did you find this deal and how did you negotiate it?

However, I think it would be difficult to build a functional ADU over a garage on that small of a lot since the building form for an ADU has setbacks and building envelopes that would severely limit the building size.

At first, he said everything was functional and livable.

The roof/water heater/HVAC/Appliances/Flooring are all new but, HVAC is not functioning and is not up to code. 

It was built in 2005 so many of the features are outdated but they're functional from the looks of things.

The one that tops it for me is when the largest house I manage (5 bedrooms, 12 guests, average $650/night in high season) became infested with bedbugs in the middle of summer.

Second, it looks like you are dealing with someone who is legitimately low functioning so tread carefully and document everything.

You aren't "almost/sort" functioning like a real estate agent... 

Lastly, I urge you not to make the mistake of thinking, just because you do the property management yourself, that the expense of that function magically disappears!

I just need some basic functions, tracking rental income and expense categories.