I don't anyone is doing it to be intentionally misleading, but it is a very important part of the conversation.

I already pointed out earlier that common sense is often ignored when juicy tax benefits are brought into the conversation.

From our conversation, it seems like there are indeed properties that will cash flow in the 6-8% Cap rate and 10%+ cash on cash rate and that there are Debt-Service Coverage Ratio (DSCR) loans around 5.5% and 25% down that will fund a purchase with the appropriate cash flow. 

The "backdoor Roth" strategy allows someone who earns too much income to be eligible to make a direct Roth contribution, to make a non-deductible contribution to a traditional IRA, limited by the annual contribution limits ($5500 for 2013), and then do a Roth conversion by rolling the contribution over from the traditional IRA to a Roth IRA.

Personally, I don't mind co-signers IF your spidy senses aren't tingling in those open-ended conversations. 

If the answer is, "Oh I already have a guy out there or boots on the gound out there so I won't need to" then it ends up being avery short conversation.

If you're really intent on keeping the resident in place then I would just have a conversation with the manager and see what can be worked out, but if they're sticking to their agreement they signed with you, than you might have some decisions to make. 

Future tenants would likely appreciate the extra storage, and it could make your duplex more attractive in the long run without the hefty upfront investment that a full conversion would require.Another idea is to repurpose the shed into a functional office space or a private workout area.

It's free to contact tax office and have a conversation.

Some great resources and conversations here.