It could entice you to buy when you are not financially ready to buy.  

Quote from @Richard Eric Hughes: My question is what ae you planning to do?

I think the ultimate situation for what I described above (not the plan, but a possible outcome) could look like this:Rent main house by the rooms while constructing ADU.

I'm planning to use that money for a downpayment  to buy a multifamily where I would live in one side and rent out the other side. 

Also ask, when you submit the plans does the city give a hard time on all the stuff or just a couple things. 

@Ofir R.Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

A good real estate accountant can save you thousands of dollars by leveraging entity selection and formation, tax deductions, cost segregations, bonus depreciation and tax planning.I recommend finding an accountant who specializes in real estate taxation, business taxation, financial planning and tax planning.You may want to consider working with your accountant remotely to expand your options.I would also recommend looking for a accountant willing to work with you throughout the year.

-------------------------------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

So, it is something to be wary of with the liklihood of choppy financial waters ahead. 4.

In this instance, there is no control and just hope.I would ask for financials, what happens if rates do not go down, and really get a better understanding.