The monthly payment is only ~$720 and the interest rate is fixed at 8% fully amortized with no balloon. 

In San Diego at the current rates for a purchase loan (which has better rates than an ADU additions) at high LTV, I show 1% does not cash flow on a sustained basis.  

@Michael HoustonSo cap rates are for commercial properties so they have no use in 1-4 unit values.

Quote from @Roger Flot: I was reviewing some renovated listings in my area and one indicated that even though the house was originally built in 1920, because of all the renovations bringing the house to current code, that you could get 2024 rates on insurance. 

The higher rates and no point options hopefully are temporary for you until you are able to show a 2 year history of 1099 income, refinance early in 2026 once you have completed your 2025 returns. 

Typically this means they will take longer to close, may not have all the information for the companies they work with, and most hard money brokers get their money by taking an existing product and adding extra points to pay their fee.What is your investor success rate?

For Non-Admitted carriers, the important item to then pay attention to is the AM Best rating (or equivalent rating agency).

You need to be aggressive with your pricing to compete for the few available renters.I recommend dropping our price to $1,750 and offering a month-to-month lease or six-month lease.

So this is creating more competition and more agreesive rent rates and/or concessions like 1 month free to get those vacancies filled.

it also means their interest rates change with the Bank of Canada rate.