Then the lender would say that house is worth X% of the loan.

Quote from @Alan Mills: Yes, I would agree with Chris and Bill, but if you have an option to get around this by putting it inside the house?

Still lots of work to do on the house and the “book” I still have to figure out what to do for it (paper/digital/both), and a few more things I probably am not yet aware of … reading on this forum and asking questions sure has helped out a lot.

They are trying to rent a house they do not own. 

And not knowing their numbers also makes it next to impossible to know if you have a bad PM that's eating into your cash flow as well (Like Vacasa charging $800-1000 a month for elecrtic on a 4/3, 2000sqft house with a pool). 

The main house will be house hacked for the first year and will turn into a co-living.   

Quote from @Edward James smith: Hello, I currently own a single family house with an ADU, and a duplex.

This move-in ready house features a stove/oven, refrigerator, and dishwasher in the kitchen.

The interest rate isn't that huge of a difference between the 15 and 30 so worst case scenario if you have the 30 year option is you start paying it down on a 15 year timeline - sure you'll pay a little more in interest over the 15 years, but it will have been worth it if you bought another house.

I have done some research on ADUs and have come to conclusion that getting a house near a hospital or good college area with a big yard to add an adu and convert gargae to junior adu would be best.