I can pretty much guarantee that you will loose WAY more money trying to get out of the lease then you will spending the extra hundred dollars or so to paint an additional room or two.

9) adding multiple ADUs or adding an ADU to a quad looses F/F conventional financing.

Its a tough subject because logically, they are joint and several guarantys so rationally a 100% guaranty from each of two people (one 740 one 680 for example) is ALWAYS going to be better than just one 100% guaranty from someone at 740 (so it wouldn't make sense to have a better rate for the latter)The problem is that there is fraud and "straw borrowers" out there where someone who is not involved in the property signs on to boost score and terms - so many DSCR Lenders in response either do the "non-rational" thing and price to the lower to avoid the fraud or use the higher of the two (and either be a little loose with things or just stay vigilant on any funny business)

Consider an unlucky combination of circumstances - i.e. you loose your job at the worst moment.- increase in vacancy to 30%, 40%, 50% (this could be a combination of bad luck: one unit water damaged, one unit tenant trashed, and you have to evict two more - on a 10 unit portfolio that would be tough, even though only temporary)- lower rents (for whatever reason, what happens if rents go down 10% or 20%?)

We signed up knowing what we're doing and willing to loose on the cost of the 3day.

When you have one tenant not paying their $50 portion it is whatever, but when you have say 6 or 7 and your loosing out on $1000 a month you start noticing it a lot more! 

You might still make some money...or you might loose just a little while you learn....but I think chances are unless you totally mess things up or every part of the deal goes wrong, you end up with most of your money back....AND you learn and develop some relationships.

Also I would loose a huge tax right off and being self employed I need all the write offs.

I would consider this a very loose agreement for an arm's length deal.

Assuming it will be Single Member LLC (you as a member/manager), it will come back on your schedule E anyway, so only thing you loose is $800 in california and bit more of paperwork but that preps you for future.Note - this is a very high level advise and mostly a personal preference.