@Jon Taylor I agree with those basic generalities.

Basically, there's no free lunch when it comes to taxes.Depreciating property lowers your tax basis.

Hello Kilroy, When it comes to appraising ADUs it will basically be left up to the appraiser.

I am not really a fan of the program because we have a very nice situation in our current home.Putting 20% down for a conventional loan is a steep task financially so I do not think that is an option plus I have been told by many of my friends with multiple MF homes to never use your own money to get into one.Then there is always using the equity we have built up in this current MF home we live in to purchase the next - I am not sure how that works but have done some research on home equity loans and believe that would be another option.Any advice would be greatly appreciated!

I think it depends on the market.. they approached me on a furnished rental I had in Vegas (Summerlin gated community A class)  We got basically double or a little more of the normal rent..

Part of that you can justify because of the necessary repairs, but overall higher price points appreciate differently.The median home price has basically doubled in Milwaukee from about 160k to 320k in the last 10 years.

My goal is a win-win situation, and it's basically for him to do owner financing and rent. 

I responded to your DM, but it's basically what @Chris Seveney said.

Ok, so basically if you have your 25% downpayment you can just go buy any property off the MLS.  

What they are basically selling is that we bought $150k worth of appliances/cabinetry/carpets etc with the property.