Quit comparing it to other forms of investing because you are wasting your time and, at this point, creating a lot of unnecessary negative attention to your idea. 

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

This creates a negative initial position.

My concern with declining values, increased inventory and a weaker economy would lower rental income and could potentially put me into a negative cash flow situation.

I’m based in Portland, Oregon, where residential investing seems challenging due to landlord-unfriendly policies and negative cash flow on higher-quality properties.

I wouldn't have any interest in buying something like this to hold since it would be so far negative cash flow wise on a monthly basis.

The cost to build will be significantly more than the amount of “value add” of an ADU putting you in a negative equity position.

It allows you to skip the stress and time-consuming process of managing rehab projects and focus on the cash flow aspect. 

So your super basic P&L may look like: $30,000 Rents-$3,000 insurance expense -$9,000 interest-$3,000 taxes-$8,000 operating expenses-$14,000 depreciation ----------------$7,000 loss on paper for the year  so negative taxable income But remember- $14k of that (depreciation) was something we didn't actually spend money on- so cash in bank at year end would be $7,000. 

I believe it's a great and thriving community with unique aspects that make it stand out from other markets in Texas.