More control of the active income of our business due to long term rental market changes that are being effected by the rates as well as growing deal prices.

In San Diego at the current rates for a purchase loan (which has better rates than an ADU additions) at high LTV, I show 1% does not cash flow on a sustained basis.  

Surprisingly, these homes that once sold for $7,000 are now selling for close to $1,000,000 and it doesn't seem as though the rate of appreciations is decreasing anytime soon. 

Yes, residential does give me a lower cap rate, but it's more stable. 

This for us is preferred over seller financed deals as we can do 65% LTV, 800 credit with someone who has net work 2x+ loan and get double digit rates. 3.

At the end of 2023 I purchased an old 4plex out of state (MD) for $180k (it appraised for this amount), 20% down with 7.99% rate, mortgage is $1364 with piti.

I promise you will have options once you finish renovating.If you purchased correctly (location & purchase price), you will have enough equity so that you can either sell it for tax free capital gains, cash out refinance (if mortgage rates are lower), or pull a HELOC to acquire your next property!

If the rents are already nearing market rates, will she be able to go up that much? 

If you provide excellent housing and excellent service it is likely that your turnover rate will be lower resulting in less future vacancy.

It might mean giving up a lower rate but if you do not have the personal capital or do not want to part with it, it is the easiest way.