I also agree that RE appreciation is unlikely to match the last dozen years, but you never know.Where I am unsure we agree is that paying $450k to improve the cash flow ~$3k (your numbers but I expect my delta wold be similar meaning both my cash flow estimates would be worse than yours but both would be worse by the same amount not affecting the difference) makes sense especially if the cost of having the extra $450k is only 6% rate which is historically simple to beat via numerous investment options and hopefully no one is investing in RE for an expected of 6%.  

Without doing a deep dive explanation on this forum, I will say that everyone can play with numbers to create whatever picture you want.

I faced numerous hurdles and stressful moments, but I persevered and built a successful approach.To tackle this challenge, I recommend starting early by building relationships and seeking investors.

Search the BP for ADU appraisals to encounter numerous examples.

@Diana Teng there are a LOT of potential pitfalls:(So, it's vitaly important to not just find someone that you think you can trust because they tell you what you want to hear, but you find someone that their processes seem a good fit for what you want.EXAMPLE: we do BRRR Turnkeys for clients and take numerous vides we share with them - initial, worst state of any demo, when HVAC, plumbing, electrical update BEFORE walled in, before any major payouts and of course a final walk-thru video.One thing that's accurate from all the HGTV renovation/flip shows is that you should expect and plan for surprises!

My question is: how do you do that and comply with Dodd Frank, which imposes numerous regulations if you finance more than 3 properties per year to consumers who will reside in those properties?  

With the explanation that they've been good about updates and have a plausible reason for the pause.

There are numerous articles on this site that explain the pros and cons of investing in multi-family vs. single family.

If the tenant has a reasonable explanation and a solid plan on how to recover we will work with them.You are asking the right question: how are you planning to pay double rent next month?

I'm just hoping someone with actual knowledge of it can provide some information that offers an alternate explanation.