The main issues a lot of investors/PM's run into is the inspection period since Section 8 inspections are no walk in the park.

That is done via placing the highest quality tenant possible, keeping issues to absolute minimum, keeping maintenance and service calls to minimum, because to make it work properties have to operate on cruise-control.

The issue is his definition of cash flow. 

We are a small partnership with 4-5 properties currently, but we are growing and hoping to find a reliable lending partner that we can do repeat business with.About 3 months ago, we successfully completed a BRRRR deal where we had excellent numbers, over a 1.25 ratio at 75% LTV, our guarantor partner has an 800+ credit score, and we had no issues qualifying for the loan.

A lot of maintenance issues are repeated again and again on all the properties a PMC manages.So, a PMC has pretty good idea of what many issues cost.

I say to look at these hard because these items can occur for a period of 12 months possibly without major issues of seeing large cracks or settling if a lot of water hasn't been present in large volumes.

I'm also having issue with no onsite manager, but in regards to insurance. 

Within a residence there is a presumed right to privacy and installing cameras by you or your tenants can bring you legal issues.  

Renovations were quite a bit more than we had expected due to more issues than we were aware of.

If the commercial space isn't too disruptive, you shouldn't have an issue renting an ADU up there.