US immigration ran a criminal background check on me when I came to the USA 35 years ago (it was clean!)

Luckily we used sweat equity to transform this property to a suitable, safe, and clean beach house rental.

Less expense as well as you're not supplying consumables, paying cleaning, paying for broken furniture glasses, etc. - Rental policy is required.

Because I will be doing the rehab and garage is a clean slate, here are a few options I am considering:Convert it to a master suite, which will make the house a 4/2 with 1500sfConvert it to a studioConvert it to a 1/1 My goal at the moment is to maximize ARV for refi, but I am not sure how the appraiser will look at it.

If the SM had a multiplier of 10%/year, and the RE had only 5%, if you did #1 above, you would end up with a return the first year of the following:     A - SM:  $120k x 10% = $12k;  New total = $132K     B - REI:  $600K x 5% = $30k;  New total = $630k...and, thanks to the power of compounding, every year after year 1, the spread between the two gets wider....in favor of REI.

Clean the place up, bump it up to market rate, and be more deliberate when screening in the future.

Make sure you are accounting for all expenses, taxes, maintenance, HOA, cleaning, furnishing, etc, etc, etc.If it cash flows...it cash flows.  100% OPM is nuts.  

We get occasional reminders from him about not overloading the circuits by over using power strips - which is surely done in order to accommodate for the pathetic lack of available outlets. 

They refused to clean the carpets and went on and started replacing all carpets in approximately 700sq ft living space.

Of course, if Boxabl if furnished for that amount, might be better...but just make sure the total budget includes permits and installation/trenching/etc needed to attach to your sewer, power and water.Good luck!