Processes have been set up to provide a degree of protection to parties  involved in subject to transactions.  

I'm not completely foreign to the construction process as I grew up around a family that was involved in home building, but due to living in another state I can't really lean on them for the direct, hands-on guidance. 

The Midwest is probably your best bet for a number of reasons.

With online access to almost every jurisdictions property recordings, lenders today use software that automatically searches property transfers for transfers involving their loans.  

I'm sure there are other similar services out there. 2) DSCR loans would probably be your best bet.

Most value adds involve work   Some require specialized knowledge.Here is a list of why adding ADUs in my CA market is typically a poor RE investment:1) The value added by the ADU addition is often significantly less than the cost of adding the ADU.

There is a lot of training involved, it takes months (up to 2 years), and they usually like to start them off as puppies.

When investing in high cash-flow markets, I always recommend working with an investor friendly agent so you're able to gain the right insight on the different areas and the risks involved.

My bet is you do not get sued.  

I have a bit of experience with co-living investors, having been involved in several co-living investments for five years.