With $15-20K liquid, focus on lower-cost Midwest markets where down payments stretch further. 

The big issue is building a single small residential unit is the most expensive residential development.Here is a list of why adding a single ADU in single family zoned areas in my CA market is typically a poor RE investment:1) The value added by the ADU addition is often significantly less than the cost of adding the ADU.

Don’t forget. 2024 rent cap was 8.9% so you may never get “market rent”.

And , since I had been working in an industry I really wasn’t passionate about, this was my chance to try an industry that I have had a passion for for the last 12 years or so.

I live in a town of about 100k people here in Dothan, AL, so STRs aren’t the most popping market.

I was wondering if anyone had ideas on how I might be able to attract more tenants who are okay with having this type of policy as I know it might be a bit of a niche market, but I'd love to hear any suggestions.

There is a high concentration of those in Texas (about 2/3) but it is relatively similar in most of the markets we lend.

Plenty of 50-60% leverage loan options for developable land, and may still be more marketable to the LP if you went that route even if it meant incurring some additional finance charges.

Any advice on starting out on this in the Houston or Katy market?  

we build at or slightly below the average new build in our market where there is high absorbtion