They could also fix it on their own (as some of Scott's buyers do) , increase the value and sell it at higher price than bought, pocketing the difference. 

Long term interest rates should continue to increase.  

How do SFHs fare in competition with these rentals as supply increases?

Buyers usually want to purchase on today’s value while sellers often want to use future potential of the property (“current rents are below market” or “room to build an additional property”, etc) to increase the purchase price or likelihood of a sale.

Not sure if it’s already been discussed in this thread but have those that built ADUs experienced a significant increase in property taxes?

Deviations from the PLRs will significantly increase the risk to you since your transaction did not follow the PLRs exactly.Deviation from Private Letter Rulings There are a couple of areas where transactions deviate from the three (3) Private Letter Rulings discussed above.

This is very helpful.I agree and am aware that there is increased risk to an auction property. 

Because here, the proposal would increase property taxes about 5x.  

As an example, our request for rent increase that was submitted in Sep 2023 has not been processed and may never be processed.

I have clients who are increasing their cash flow by between $19k and $55k and their cost basis is between $145k and $200k.