Does one exist? 

Completely new to this space any advice or recommendation is appreciated. lots of ways to answer this but from experience there is existing, cash flowing inventory of single family, multifamily, commercial. there is new construction of single family, small multi family, and large development ground up multifamily. we play in the second area. all urban core higher density infill lots best locations.

Tax (and often even zoning) designation don't change the comps for what it physically exists as.Is a residential appraiser telling you this, or are you basing this assessment only on your own understanding of these classifications? 

Just trying to create a loophole or use an existing one.Any insight into this idea or suggesting on alternative route...

This implies that this zero risk, high return you seek likely does not exist in RE

Here are a few strategies to consider moving forward:1.Consider Existing Properties:Since new construction timelines are extended, you might explore purchasing an existing property that you can renovate to include a Next Gen suite.

The opportunity for outsized profits versus LTR always exists, because it requires much more work in terms of marketing, maintenence, cleaning.

My existing portfolio definitely hews toward working poor, but in areas where the locals tend to keep their yards up and have at least a bit of self-respect.

What only exists is the "right" month for YOU. 

Something to keep in mind as well would be if there are any prepayment penalties on the existing loan that you've got as that would cut even further into the funds you'd be looking to take out.