My assumptions based off research is I will be able to deduct 1/2 of all allowable expenses based off the ADU square footage (My understanding of that list below)  1/2 Mortgage Interest (Not principle) 1/2 Utilities 1/2 Property Taxes 1/2 Insurance (assuming I don't have separate ADU insurance)  1/2 general house maintenance (depending on the issue and if it's related to the ADU)  1/2 Depreciation (Home value, not land divided by 27.5)  KEY QUESTION: If my mortgage (PITI) is $5400, and all of those ADU deductions equal $3800 monthly, and my ADU income is $1800 monthly, am I allowed to pay the difference in "deductions" from my real estate business income? 

@Jeffery Goode Am I allowed to do this as a non licensed agent?

After Operating Expenses are deducted, we're looking at about $13K in NOI.Purchased for cash at the full asking price of $244,900, and assuming NO CapEx or renovations, that's about a 5.3% Cash-on-Cash return.What am I missing?

Am I going to have to take over the Mortgage payments?

It seems so much better cash flow than properties listed in my area, where you're lucky to get a couple hundred bucks.Example of break-even in Tacoma, WA:https://www.redfin.com/WA/Tacoma/3734-S-M-St-98418/home/2978...What am I missing that these seemingly ridiculous cash flow properties are available in other areas in the country?

Am I better off focusing on doing a flip or wholesaling rather than doing a buy and hold?

Am I missing something?

I am not an insurance agent nor am I currently affiliated with any of these companies. 

Questions: 1- Does the above strategy sound correct or am i am missing something? 

What am I getting at?