Quote from @Paul Lucenti: Creative methods tend to increase risk.

I have a very low risk tolerance for stock and many other market driven vehicles. 

There is risk for the landlord in being added as an insured though - specifically if the tenant and landlord are opposed in a matter. 

Taking the risk of a tenant while you yourself are renting is not optimal in my opinion.

My current situation is, in part, a result of playing it too safe and avoiding risk altogether.

This doesn't mean I'm not exposed to tail risks that could demise my life, but I feel a lot more protected and have no real stress in my daily life. 

It sounds like you have an un-permitted unit, which is essentially always a risk since there has been no notice to the AHJ that it exists and they can therefore initiate a code case to have it removed in most cases.

However, if single-family homes prove financially viable, I’m happy to continue building in that niche.Since these homes and projects are significantly cheaper than my market, the risk is relatively lower for me and can do at least two at a time.The ChallengeOne of the biggest hurdles is finding reliable contractors and subcontractors in the area.

Here are five dangerous provisions to watch for in an Operating Agreement:Dangerous Provisions to Watch:Authority to incur debt without investor approvalPower to make loans to other entities/projectsAbility to cross-collateralize with other propertiesPermission to use investor capital for other venturesCommingling of funds across different projectsWhy These Are Potential Ponzi Indicators:• New investor funds could be used to pay existing investors• Project-to-project lending can mask poor performance• Cross-collateralization puts your investment at risk for others' failures• Commingling enables masking of financial problems• Lack of project segregation enables fraudulent schemesProtective Measures to Look For:Strict single-purpose entity requirementsProject-specific bank accountsDebt limitations and investor approval requirementsProhibited related-party lendingClear fund segregation requirementsProfessional Best Practice:Request bank statements showing separate accounts for each project.

IT's the worst place in the world to be a landlord and very high risk.