The simplest way is to base it on the market temperature of whatever city you’re researching.

Additionally, the study must be completed by “qualified individuals” and “professional firms” that are competent in construction, design, auditing and estimation procedures for building construction.So while a specific methodology isn’t required by the IRS, taxpayers must ensure that their depreciation deductions and classifications of property are substantiated with supporting evidence.

In both you are now paying taxes on an additional $1K/mo.

But there are many things that can be done to greatly reduce the chance.For example, many sponsors are audited which provides an additional set of eyes.

Quote from @Victor Yang:In addition, is it possible for me and my wife to gift 36k worth of equity per year of the house (under the annual exclusion limit) and therefore have none of the costs go towards the lifetime gift limit?

I considered suing for non-performance but felt the hassle of doing so would not be worth the benefit.I'm still hopeful and looking in the Flint market, I just would not use them to do so.

It is common for investors to bring in additional signers, often referred to as credit enhancement.

If you know of anyone that would be an ideal fit for this role, please encourage them to apply.We're looking at designing a mobile experience that will, in the long run, offer:1) Networking and Community features as powerful as Reddit or LinkedIn2) Educational/News features as powerful as the WSJ or NYT applications3) Market and Deal Finding Capabilities as powerful as Redfin, Zillow, or Realtor.com4) Portfolio Analysis, Property Management, and Wealth Management capabilities.If you have any additional suggestions or features that you'd love to see in our next mobile app, please post here, or message me directly.

Most of the time, an ADU will cost 100k just for that part and then you have to actually build the cosmetic part for an additional 40-50k. 

Additionally you can always write in what was done to correct it and explain that since then you no longer had issues.