If your objective is to reduce your own tax burden, you are in essence confirming they have no valid AP claim.

It’s still a worthy strategy to force cash flow that’s rare to find in SoCal, especially if you can reduce the cost of construction by doing a conversion/using an ADU grant or even buying a property with an existing ADU In general, even if the ADU valuation matches your cost including grants, they are usually not worth it in southern CA in single family zones. 

They realize the due on sale clause could get exercised and believe the risk is justified by the reduced rate.

High probability that you’ll uncover an oh-$**** issue that will reduce or eliminate your projected profit. 

Also, just because you will be renting to S8 tenant does not reduce risk.....yes the tenant may be on a voucher and it will cover 70% at the least of the rent but the tenant quality will be low.

This reduces exit options and affects the value. 10) Small number of small units is the most expensive residential development there is.

My tax advisor referred me to them, and I also utilized cost segregation on the properties, which significantly reduced my tax bills.

Add to that the fact that private financing typically involves way less bureaucracy, with reduced paperwork and fewer hoops to jump through.

They based their loan on ALL of the properties, if you reduce their collateral value, you worsen the position that they did the underwriting on.

Credibility Package - $7,800 reduced to $5,800 if you sign up right away. 2 to 3-month payment plans available.