I think ADU's are a great option for the buy and hold investor to maximize cash flow since you already own the dirt so adding units only has the construction cost aspect (and some soft costs associated with that).

If the market is soft, cap rates go up because buyers aren't willing to pay as much for the income stream, usually because they think that the income stream isn't going to go up much, if at all, or might even go down.  

With ARV at 135,000 at a maximum loan of 70%, you can borrow up to 101,250 which means, in this scenario, you could get the 85% of acquisition and 100% of rehab, i.e. total loan amount of 83,750 with an initial release at close of escrow at 63,750 which is 85% of acquisition, and, the rehab holdback of 20,000.15% of the 75,000 acquisition down is 11,250 and closing costs are likely ~3,000 so you initially need ~15,000 to closeAfter close, a prudent hard money lender will require reimbursement style draws which means you must first complete at least phase one of improvement/rehab to the property before drawing down on the rehab hold of 20,000.With only ~5,000 left over after close, you don't have much room for soft costs like utilities, nor much room to get the rehab started, nor much room for the monthly debt.

Their reservation is a soft reservation, because they didn't want to pay the deposit to hold, which is non refundable.

Missing some soft costs like repairs and capex. minimum of $150

It's a plastic tote with a towel.

Toilet paper, cleaning supplies, coffee, towels and sheets, laundry detergent, etc.  

As an aside, the soffits are now vented and soft-story ordinances in the area are for 5+ units.

I hear the condo market is soft right now, so it's a great time for you to kick things off!

Missing some soft costs.