The reason I even ask is because I do have a clear understanding of how loans works, or should work.

Nowadays we can't even imagine "no closets!"

Ask lots of questions, read as much as you can, and then ask even more questions.

With the fires in CA, you can expect materials and contractors to become even more expensive. 

This friend and I have done 2–3 deals together, and there’s never been a payment dispute or even a hint of cutting him out of something.

I work with a turnkey provider in Little Rock, and they are offering a 5.99% on all of their properties, even the new construction.

Such a situation is recoverable if there is enough time for a market recovery and the cash flow is at least break-even (or there is enough reserve cash to cover negative cash flow until it can turn positive). 

This allows many groups (I know the crew at Easy Street can do this) even close a loan in a week or less.They'll stay off of your personal credit, while not impacting your personal debt to income which is valuable as you start to scale.

So, landlords of exempt units don't even have to be concerned at all.   

LOL people is funny when many of them invest without even opening an excel sheet.