My gut says I need to cut off of this deal,  but curious to get your perspective.

Identify the biggest losses and cut those with as minimal a loss as you can.

So as investing partners it makes sense because we will both have extra cash at the same time, we partner up to cut the risk in half + we both specialize in a couple things the other does not in terms of being a rental property owner (e.g. running the books + marketing vs actually fixing things).  

So many LOs were preaching mortgage rate cuts, this time around, and now I am seeing rates still the same, if not even slightly higher than what they were a few months ago. 

Upper levels with slanted roof lines cut into living space which is very outdated and much of it becomes deadspace. 

So I'd be doing my best to get the highest possible rent/revenue but without needing or counting on that.What you refer as cut-throat competition exists in every market where you have demand.

You can’t close discussions on here, but this is a clear cut case with my attorney.

Anyway you cut it they will all want a washer/dryer. 

I plan to shop around more but I’m surprised that there aren’t more funding options in California with the recent popularity of ADUs help with the leverage component. 

Some lines they will say have been "cut" but they put in a disclaimer on all sales that they don't know if a line might be cut.