We’re looking to remodel our small kitchen (about 12 x 12, L-shaped), and convert the garage into 2 bedrooms (not an ADU, no added bathrooms or kitchen, just adding bedrooms to the house).  

I know it needs a few things (bathroom size) revised to make it code compliant, and I will need an architect to help navigate zoning (another thing we don't do in Houston :D), site plans, elevation aesthetics and local requirements. 

I rent out the master bedroom, bathroom, and an independent kitchen area with its own entrance for $1,200 per month.

Purchase price: $235,900 Cash invested: $70,000 Sale price: $399,000 Complete Renovation: deleting walls to open up kitchen into living room, new kitchen, cabinets, appliances, custom doors, floors, trim, paint, new laundry room, new powder room, new master bathroom, custom woodworking, exterior farmhouse paint, all new interior paint, etc.

However, the market has changed in that time period with interest rates changing and homes staying on the market longer and longer.You mentioned the big ticket mechanical items for the house, but it sounds like paint, flooring, kitchen and bathrooms we're mostly untouched.

On one of their finds, they told us that they found black mold in the kitchen and bathroom, which is interesting since I painted and redid the faucets in those two areas, and saw none.  

Hi Jean-Marie,Is there anyway you can make the second bathroom as a flex space?

The house is a high ranch single-family home with three bedrooms, a bathroom, living room, and dining room on the first floor, and a finished basement that has a full bathroom, bedroom, and common area.

In my market a nice 3/1 might rent for $1350 as well but with an extra bathroom the difference is pretty negligible.

I typically just remove windows and block up the opening in bathrooms.