The two existing LTR units (on my family’s property) were built 5–8 years ago at a cost of about $80,000 per unit, so I’m estimating a 20% increase in costs for the new builds.My plan is to use the equity in the land as the down payment for the construction loan, which I expect will make closing costs the primary upfront expense.

Long term hold, with buyer planning on carrying existing financing to term without the ability to quickly cure default — terrible strategy with huge risk for both parties.   

When things outside of our control as investors change, (macro-economic factors, saturation, disposable income etc.) and there is no safety net, that's when investors can get really hurt.

I would anticipate a semi-guaranteed government run insurance program, similar to the national flood insurance program of some sort and perhaps connected to an existing department of housing program to manifest.

There are no existing structures on the land—it’s a vacant lot.  

This is generally why nonqm like dscr exists.

This amounts to lost opportunity because if you had purchased RE, at the closing it can start producing return. 5) ADUs detract from the existing structure whether this is privacy, a garage, or just yard space. 6) this is related to number 1, but there are many more buyers looking to purchase homes for their family than there are RE investors looking to purchase small unit count properties.

This is virtually non-existent with SFH's but is commonplace with 2+ units.

Sometimes less is more and just taking the step to buy one more might be better than selling your goose that laid the golden egg in the existing successful house.

I wanted to offer him about $50K over what is remaining on the mortgage and go through the 60-90 day process to assume the existing mortgage.