If the house is older than 15 years old and an ADU is added, it can become rent controlled.

There may be some lenders that might be a little more "borrower friendly", but I haven't found them (nor do I have the time to look for them).You might be able get better terms if you "house hack" by getting an FHA loan, but I don't generally work with those loans.

Like I see how it could work in a perfect world but i cant wrap my head around the idea that I could be making a profit if I still don't actually own the house and still have to pay down all of the loans.

Borrowers like that.Since money is the lifeblood of all house flips, I consider this a win-win for everyone.

I've read many of the BiggerPockets books like - House Hacking- Flipping- Estimating Rehabs- Multifamily Millionaire Book I and II- How to Invest in Real Estate with Low or No Money Down- Investing from a Distanceand even some outside of themand have been wanting to do something in Real Estate for awhile.

The property is a 4-family house in Montvale NJ.

Something I forgot to mention is I’ve been in the house since 2017, so the 2/5 year rule shouldn’t matter.

We already paid them a pretty sizeable entry fee ($30k) to cover some of their equity and debt in another project..Your title report should have alerted you to the issue.The payoff the escrow company got from the lender should have alerted you to the problem.Your interview of the seller before you bought the house, should have alerted you to the problem.You calculations on the numbers should have alerted you to the problem.Check, cross check and check again.

To communicate that a candidate doesn’t meet your qualifications without violating fair housing rules, you can simply focus on the criteria rather than the individual.

Only other wild card is if they destroy the house on the way out.