@Jonathan Chan How did you arrive at your soft cost numbers(vacancy,repairs and capex).

@Demetrius Ward how did you arrive at your soft costs (vacancy,repairs, and capex).

Things are so soft with the rental market in Chicago any tenants are good tenants especially if they are taking care of the place. 

@Zachary McDonough how did you come up with your soft cost numbers.

Excellent condition, Woodmere is the brand, cherry wood finish, soft close/ magnetic close doors.

The return on capital is quite good in most cases for ADU's as you already own the dirt so by having construction and other soft costs without the cost of the additional cost of the dirt, you get a good return.The SFV is likely more conducive to your cash flow for this, but it is certainly possible in the SCV or even Castaic. 

“Gosh, that’s horrible Neil” he crooned softly in his Texas drawl

In addition to the above considerations, because of the timing and soft costs you need to be planning a project large enough to make the HUD process economical.

No soft costs, Vacancy 8%, repairs 5% and capex 10%. 

Compare that to the more "soft" data.