Also, be honest with yourself that the approach you describe is intended to take advantage of people who just don't understand what a terrible deal you are offering them. 

Our  (San Diego’s) rent to RE price is terrible especially for on market purchases.  

Yes, but that's our whole business model, so it's not terribly surprising to us. :)You're in the right forum to learn about MTRs.

If you're capable of getting funding from a bank, those terms are terrible.

There are some that are great for sure, but I have currently heard terrible stories about people putting money in the last 2-3 years and losing it all, capital calls and losing the whole deal due to bad bridge loans (some coming do very soon). 

Truly terrible experience.

My point is it is a difficult RE market, but adding an ADU is a terrible investment.  

Truthfully, I don't think a Capitalization Rate of 8% is terrible plus you'll have an appreciating asset along with the tax benefits.  

Real estate investmnets are capital intensive and if you don't have extra money sitting around to make the emergency repair when it happens you'll find yourself in a terrible position. 

They are also the same individuals who are constantly involved in conflict, have terrible loss run histories and therefore higher insurance premiums and are paying far more on legal.