But a certain amount ( the dreamers) go into CC debt to pay for it.

A heloc is also calculated at it's Max amount usage even if not used during underwriting for a new mortgage.Cash out is tax free and it can be used as an "Asset or Liquid reserve" on new approvals. 

The best way to look at things is the amount of hastle and money the pm will make. 

The key factor is the amount paid and the nature of the payment, not the payment method.

@Kyle Carter we manage around 700 doors, with 92 of them being S8.When S8 applicants are properly screened, they can statistically perform a decent amount better than cash-tenants.

As you note exiting any RE that does not have some appreciation of a significant amount over say a 5 to 10 year hold generally speaking is going to lead to a loss at sale.

Those enormous tenant buyout amounts were feasible before the 2019 rent regulation act. 

First, I would never try and provide tax advice to a seller, it will get you sued, especially to a 100 year old person.Regarding seller finance, since the amount is spread out over long term, they should check with their CPA on how they are or are not taxed on the gains as well as interest on the loan.

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.

Plus, you will gain more equity in a shorter amount of time.