We would be paid an hourly rate and whatever we  spend/accumulate; the friend would get the cash rent until the differance is paid. 

If you’re looking to build long term wealth, accumulate assets, take advantage of tax code, and benefit from appreciation, then play the appreciation long game.

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.

You have decent cash flow that you'll continue to accumulate, which you could put toward a deposit later for another property. 

The government still might get the Equity buildup, thus you want the payment to not accumulate to much equity. 

There are some accumulated passive losses but not much.

Both screen doors upstairs do not function correctly.Plumbing problems-The garbage disposal in the kitchen was not cleaned, is smelly and the rubber is flipped outwards.The bathroom sink in the smaller bedroom does not drain correctly despite us using an entire bottle of drain cleaner on it.Common areas that are not kept clean or have garbage-There was no attempt to clear the patio of years of accumulated debris and filth.

Additionally, as a new investor, I am curious if you would recommend this strategy based on your accumulated knowledge and expertise.

Meanwhile that guidance pushes many investors towards purchasing in areas where they do nothing but accumulate terrible assets solely because they are inexpensive.

At no point does there appear to be an accumulated balance but rather just a series of payments coming.