But you'd always want to talk to the city right away (or county) and find out the development standards for the zoning that the lot is in (what are the setbacks, height limit, min lot size, etc).

If by Adult Family Home you mean a non-medical "assisted living facility" (ALF), these can be quite profitable. 

Here are standard terms as of today:2 points10.49% - 12% rates75% - 90% LTC100% rehab included up to 75% of ARV

There has never been a standard commission of course (anti-trust laws), but now it is a very different time than it was the last few years!

I am a regional clinical director where I oversee multiple facilities serving individuals with severe and persistent mental illness.

Additionally, for rate-term refinances, many DSCR lenders have no seasoning requirements at all.Easier qualification: DSCR lenders have much lighter qualification requirements than conventional or portfolio lenders, such as no DTI, income verification, or tax return hurdles that can slow down or disqualify loansFlexibility: While conventional and bank lenders are heavily regulated and follow standardized rules, DSCR lenders have much more flexibility and control over their guidelines.

Respectfully,Zach The best bet is likely to create a new LLC that lays things out in a straightforward but legally strong and standard operating agreement, etc. - LLC doc sets are fairly cheap and easy to create these days (with limited assistance from lawyers) and its much much better to have that cover bases on arrangements like this - it will also fit nicely with financing options - whether you take on debt from a lender in a co-equity situation like your first plan (refinance loan to LLC post rehab?)

Secure a credit facility with a Hedgefund or bank and lend that money out..

. - unless you get some whacko judge, there should not be any issue collecting rent on unpermittted unit, having a move-out cost (no fault eviction) in excess of the standard rent control or eviction process in excess of standard rent control hurdles.    

Not 1 time has a standard rental poo-decorated a unit, not 1 time have I had dead bodies at a standard rental.