NOtes are much more complicated with a lot of regulatory issues etc that buying RE simply does not have.

According to market data, the volume of mezzanine and preferred equity investments in commercial real estate has increased as traditional lenders pull back due to higher risk and regulatory constraints.

Otherwise it can be years of dealing with legal/ regulatory issues and angry neighbors. 

Why is it not equally as common sense about a complicated legal process involving hundreds of thousands of dollars, layers of regulatory over-sight from Federal, state, county and local. 

Real estate investors are attracted to medium-term rentals to gain the benefits of extra cash flow versus long-term rentals while avoiding regulatory risks, high turnover, and intensive management of short-term rentals.While many investors are now turning to medium-term rentals to build their portfolios, the lending world has unfortunately been a little slow to keep up.

Summary of Key Impacts: Factor Impact of Rent Control Investor Strategy Rental Income Growth Limits rent increases, reducing cash flow Focus on long-term stability or diversify into non-controlled areas Property Valuation May lower property values and Cap Rates Target appreciation potential or mixed-income properties Tenant Turnover Lowers turnover, reducing vacancy rates Maximize tenant retention and provide value-add services Maintenance Costs Reduces available cash for maintenance Improve cost efficiency and pass-through allowable expenses Legal & Compliance Increases regulatory and legal complexities Hire legal advisors and stay updated on local regulations Supply & Demand May increase demand for existing rental units Target high-demand, low-supply areas for long-term appreciation Financing Stricter lending criteria due to limited income growth Use alternative financing and present strong financials Conclusion:Rent control can be a double-edged sword for real estate investors.

First you have to make sure your zoning allows for a DADU and what the setbacks are. 

But you'd always want to talk to the city right away (or county) and find out the development standards for the zoning that the lot is in (what are the setbacks, height limit, min lot size, etc).

The primary variables are depth, soil structure and the need for shoring, rock interference  and setback/travel distance.

However, downsides include regulatory restrictions on bank lending, many institutions that restrict concentration and geographies, and other headaches and issues that arise when dealing with a slower-moving bank.DSCR loans are the option that has completely changed the BRRRR lending landscape in the last few years.