With many kids and adults today hiding behind social media and having trouble communicating, we have found some significant growth and added value with having him do this.

This amounts to lost opportunity because if you had purchased RE, at the closing it can start producing return. 5) ADUs detract from the existing structure whether this is privacy, a garage, or just yard space. 6) this is related to number 1, but there are many more buyers looking to purchase homes for their family than there are RE investors looking to purchase small unit count properties.

Under such conditions, you want the effort and expense of the value add to produce as much added value as possible and this virtually always will occur in the high cost market. 

Is that worth the trouble trying to convince your partners to change it?

A deal that produced a 25% net IRR to investors with a 1% acquisition fee, 1% asset management fee, simply pref + single tier waterfall, etc, may only produce a 15% net IRR under the current fee and carry structure, if their acq fee went to 3%, pref went down, they now have a GP catchup and multi-tier waterfall giving them higher splits for higher returns, etc.

If you're going to go through the trouble to buy and rehab... you're a flipper.

Hi - you sound like a perfect candidate for the "DSCR Loan" option - its the loan type thats popular wwith investors and one of the big reasons why is the exact situation you are describing - running into DTI troubles. 

They also provide guidance on entity selection, tax strategies, and long-term planning, which can save you money and trouble in the long run.

Consider selling the duplex to put it into a higher income producing asset (out of state, DST, something).

You need to show them how you can be a solution to their troubles and then actually deliver on that.