Looks like we share more in common than our names :) I'd be interested in speaking.

I provided a strategic offer to win in a multiple bidding scenario using discernment around the due diligence fee and length of timing.

MInut has a low average review (mid-3s I think) on Amazon which is a bit of a red flag. 1 per room at a total of $60/month sounds excessive for something that is not likely to be a common occurrence. 

@Michele S. this scenario is quite challenging. 

With four plex you have to pay utilities for the hallway and common areas, also maintain and clean the common areas, because the tenants won''t.

And beyond any realistic worst-case scenario, in my mind I would rather sell my own house and sleep in the car, before one of my investors would lose a cent.

However, I'm also unsure how material participation would factor into this scenario.

Quote from @Bryant Brislin: Land in the path of development that may seem a little far out, but your gut/intution and common sense from an urban planning perspective tells you that some day, whether it's in 10 years, 20 years, etc it will be a great long-term position for your family to have and hopefully sell at a signifcant multiple return compared to what you've paid for it.

If not, even though you are a re pro, losses are passive & deductions are limited.There are 7 scenarios that will qualify as material, and you only need to meet one:*500 hours*Substantially all participation*> 100 hrs and at least 1/2*Significant participation*5/10 years*Personal service activity w participation in last 3 years*Continuous participationTo materially participate, you must be involved in the operations of the activity on a regular, continuous, and substantial basis.Once you pass the pro test, the material participation often comes along for the ride.You can elect to aggregate all rental real estate for purposes of measuring material participation under Sec. 1.469-9(g).Your time spent on all your rental properties (STRs don't qualify) counts as one activity, making it easier to materially participate.In order to make a strong case with your CPA and the IRS you need to document your hours.Best practice is an hours log where you are as specific as possible.

So this is common thought and why it is a real challenge to get debt secured by the ADU value add at higher than 50% of the addition cost.