Your client should consult a real estate attorney to draft an agreement with the ex and ensure there are no legal or tax issues, especially since this is an investment property.

Seek legal advice, however, what I understand is that there are really two way to wholesale that is legal in the state of Arkansas.

It separates your personal assets from your business, providing a safeguard if any legal issues arise related to tenants or the property.

That is why it is hard to get regular real estate loans on assets valued so low, the cost of the refinance makes it so you are paying higher than they can legally charge you percentage wise.

It sounds like your question is what is the conventional guideline on using these rents to qualify ?

Now most of the time we don't see househackers/investors use in-house or portfolio loans from banks because sometimes they have more restrictive guidelines and higher fees for holding it which might cause the numbers not to work or for the deal not to go through entirely. 

I've seen other people in the forum who simply use independent savings accounts but it is not clear to me if that is legal.

If you can add a legal ADU at $25k in the Austin area then you should add it.  

Your lender has a legal right to know.

Tax and Legal ConsiderationsUnderstand the tax implications and legal responsibilities associated with rental income.