You can invest with no money down - but it doesn't mean you could and should have $0. you need to prepare for worst case scenario's(roof, furnace, etc needs repairs and will need $$) feel free to ask me any specific question that you have.

In order to determine NOI, do I include only annual repair and maintenance expenses or also a budget for long-term capital expenditures (roof, heating, etc)?

Most everything essential has gone up ~30%I'll tell you what's bad down here on the southern coast - Florida, louisiana etc - homeowners insurance has gone through the roof.

Say it needs a roof or a furnace or a couple of appliances. 

amp existing panel)- Fiberglass wood clad windows with screens, an exterior swing door and 4 panel sliding glass door, and standing seam roof and a skylight, 2 new - glass garage doors- James Hardie fibre cement board or similar siding- Built-in casework for storage- An allowance for kitchen appliances including combination range, hood, dishwasher, microwave, refrigerator, and washer/dryer- An allowance for mid-grade plumbing and lighting fixtures (Delta, Kohler, or equivalent)- Ikea cabinets or equivalent with solid surface countertops- Assume heat pump and ductless mini-split for heating and cooling- Assume solar system to be installed on the ADU per California Solar Mandate, including battery storageWith regard to the JADU, we're considering dropping this and simply expanding the house to the basement.

The glass, window, roof all will not change to smaller :-)

You're putting the roof over your head on the line if anything falls through, so of course there is some risk with that option.

Imagine if we were stressed, having zero idea when or if our kids can have a roof over their heads.

I remember when this guy knocked on the door of a foreclosure I was selling and handed me a card indicating he was selling roofing. 

Additionally, cash flow can easily disappear if you need to repair a roof or HVAC system.