Excluding the periods of “tulip bulb” irrational exuberance, a property must produce enough of a risk adjusted return to satisfy both the ROI demands of the “limited partners”, and the income/time requirements of the sponsor.  

A $240k loan amount on a $249k purchase price seems crazy and I'd never expect to produce any net positive cash flow doing this.How are you calculating your property taxes?

A refi only moves part of the equity forward and usually produces a higher mortgage payment because the principal is larger, so the cash flow goes down too  Brother Joe…..I take the time and try to read your post as much as possible. :-) I follow your logic… I think.So a person will leave some of their equity in a property if they do a refi.

Nonetheless, you can base the DSCR calculation on PadSplit rent (if there's a history of PadSplit income being produced) or short-mid-term market rent (an analysis done at the same time of appraisal).

But to a Kiosoki'esk (Rich Dad)  investor my best use of cash is buying income producing appreciating assets in the path of progress.  

It's not as simple as simple as buy now and hope that "time in the market" will produce a win for you.

Looks like a young group of professionals with not enough experience, navigating through various market cycles to produce an accurate  business case.  

Did you lie to the mortgage co and produce a “bogus” lease in order to obtain financing?  

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.

Affordable deals do not typically produce cash flow.