Here's the latest market report (based on single family homes):🏡 Mortgage Rates:30-year conventional rate today is 6.72%30-year VA rate today is 6.15%——————————————————————————————————💰 Median Sales Price:Sept: $490,000Oct: $485,000Nov: $484,995——————————————————————————————————📈 New Listings:Sept: 1,910Oct: 1,959Nov: 1,481——————————————————————————————————📅 Median Days on Market Until Sale:Sept: 20Oct: 22Nov: 24——————————————————————————————————📦 Months Supply of Inventory:Sept: 3.3Oct: 3.3Nov: 3.0🤔 What does "Months Supply of Inventory" mean?

There are many excluded, niche groups (beyond the scope of this post), but here are the ones that you could fall under:Large Businesses20+ FULL TIME W2 US based employees; ANDU.S.

Although I agree with @Nathan Gesner in part, I think he is off base in categorizing a relationship based approach to landlording as "amateur".

I am not sure what tools you are using for your cash flow projections but it's possible to have a property that does not cash flow year 1 but will in year 2 or 3 and so on based on average historical appreciation in Austin TX. 

As already mentioned, he wouldn't be able to use rent from roommates to help qualify but based on the numbers you shared there should be a VA option available considering how much flexibility there is. 

Btw, I see you’re Scottsdale based - that will be our 2025 work location! 

I never go off of a flat percentage on anything, I analyze the costs to get to a specific return I target and analyze the risk that is involved. 70% may be an initial metric to see if it is even worth pursuing, but every deal should be evaluated independently based on costs, time and risk involved.

Each option has different implications, so choose based on your financial goals.

Mostly people with minimal RE experience are adding a single ADU and they often make that choice based on cash flow without taking into account the negative equity position.  

My gut tells me they are pushing the revenue and basing the homes value on that.