Purchase price: $1,280,000 Cash invested: $400,000 we were presented with the deal by a flipper needing to exit the deal. it was only rentable for $4500/mo as is, so we created a second unit. now it brings in $7200/mo What made you interested in investing in this type of deal?

As far as STR, there is a lot of debate right now as to if there is a STR bubble, or if it has already burst.

The Comps give the property a market value of 200-220 but they are selling as is so they dropped the price.

@Nicholas J MineoAs far as the ADU, I was considering that myself but if I do that my SFH is now considered a 2 unit and subject to rent control - San Francisco, Berkeley and Oakland are the worst with regulations. 

The Comps give the property a market value of 200-220 but they are selling as is so they dropped the price.

As far as the safety issue, get that out of your head and vocabularity. 

They're sophisticated people as far as investing is concerned.

To you point, when the payoff timeline is so compressed, it’s really not an interest rate sensitive loan.

All of my current rentals cost about the same to purchase ($215-265K), but cash flow is so different and current house prices are as well ($325-600K)...and the one I spent the most for and cash flows the most, is now the one worth the least (still worth more than I paid for it 3 years ago).

In my experience land lords who have that length of tenant and they can show rent rolls of payments on time are ok with sub market rents because the tenant is so "easy".