While some buyers may shy away from the 7.125% interest rate, others who are familiar with the "Subject-To" strategy or are more flexible on financing terms may see it as an opportunity to acquire a property with decent equity and no need to qualify for traditional financing.

Are these the only items we need to document?

Due to item 1, adding an ADU can require years to start achieving any return (once the accumulated cash flow recovers the initial negative position).4) Adding an ADU is a slow process.

Why couldn't the officers in RAD obtain financing for their primary home from traditional lending sources?

Basically almost all the items you mentioned when traveling can be written off to a certain extent.

When an owner replaces or retires certain items (e.g., lighting, HVAC, or carpeting), they can claim a deduction for the remaining undepreciated value of those items.

Typically most DSCR lenders follow a traditional 5, 4, 3, 2, 1, PPP or a 3,2,1 PPP.

You would only pay taxes on all passive investments in a traditional SDIRA at distribution, unless you have a mortgage, then the portion of the income derived because of the mortgage will be subject to UDFI (unrelated debt finance income) which will trigger UBIT (unrelated business income tax). 

This property needed an extreme amount of clean up and haul away of items left behind.

I think negotiations on knocking the price down on inspection items on value add will be huge especially if its a flip like you mentioned.