I recognize that commercial real estate is struggling, with ~30% vacancy in downtown Portland and homelessness issues, but I believe this property’s tenant stability and quality make it a lower-risk option. 

Hey saw your other post on this earlier and wanted to repeat for others to see as well: It's great you are recognizing this.

If they cut a lot of workforce also recognize many of them are not in the DC market.

Despite the guru fed “misinformation” about all these under market price deals, they are actually very rare and require (1) the investor recognizing value that the seller and the rest of the market misses or (2) a seller with a need for an immediate sale and a buyer with the CASH immediately available to conclude a very quick closing usually forgoing inspections, financing, and other contingencies. 

Just recognize your risk assessment.  

You would need to do some kind of 721/1031 exchange in the future if you sell the property before your death to not recognize that gain/recapture.

As a percentage closing cost as percentage goes down as value increases but we will 15X to account for closing costsNo cash flow per OP.2% market appreciation equated to 30% + 15% = 45% 3% market appreciation equates to 45% + 15% = 60%4% market appreciation equates to 60% + 15% = 75%Recognize in virtually all markets the cash flow increases with hold length especially if a fixed rate loan. 

Since you won't be able to recognize it as a valid rental if you're charging under market rent and you also expect to be covering any house expenses that are outside of her budget, this seems the best choice. 

Just be mindful of the following things when it comes to California.California does not recognize Bonus DepreciationCalifornia does not recognize real estate professional status.Therefore, you can potentially reduce your Federal taxes but not your California taxes.

I have also seen appraisers recognize that multiple ADUs by rule does not qualify for conventional F/f financing.