Don't:1 - ...stray from your plan by chasing what I refer to as "shiny objects of distraction"...no matter how good that deal might look.   2 - ...rationalize a bad deal into a good one, or you'll get out of the game faster than you got in.3 - ...listen to those that want to tell you that if you lose money in the beginning it's OK since you are learning.  

Here are a few articles that I wrote talking about the rational behind that. https://www.biggerpockets.com/...https://www.biggerpockets.com/...https://www.biggerpockets.com/...Let me know if you have any questions!

Price to rent rations are a lot better, taxes are lower, but still good rental demand and quality tenants. 

The rational stated by the judge was that the price of the permit had to be inline with the cost of providing the service.

Even things a rational (smarter) person would worry about.  

The last thing landlords need is the nanny state trying to protect people like they are morons and incapable of rational decisions. 

Am I just trying to rationalize a difficult decision?

I suspect the 40% expense ration will be fairly accurate in most high rent, low vacancy markets for the ADU. 

If your credit score and DTI ration tank due to the loans, but they pull your full credit to see that you have solid history...than really their main concern is...if I give you this refinance are you really going to pay off that other debt or are you going to keep the money and blow it all on black at the roulette table in Atlantic City...so long as you can curb their fears that you aren't going to do this...than you have success.Don't bother talking to Wells Fargo or Bank of America or any of the other big banks...you're going to be looking for smaller community or at best regional banks as well as credit unions who have more flexibility with regards to how they structure their loan terms. 

If GP team is handling this, you could rationalize getting rid of the asset management fee, or rolling it into PM expenses.