And the numbers are pretty good on the projects I've looked at. these are the very recent regulation that's from what I read, it makes more sense to add ADU into small MF.

I didn't even think to check my local govt on the regulations about rental property.

There will always be demand in the market (it's not like some covid markets that could disappear as vacation destinations almost entirely over the next decade), and the regulation risk is as near to zero as you can get in this industry so long as you buy in the approved tourist zones (again, compared to some smaller/less mature markets where they could outlaw STRs tomorrow).For short period cash flow there are better options. 

Quote from @Radhika Srinivasan: :) Yeah, I started off around Reno,NV & Tempe, AZ, but I think the median prices look way higher, so I am beginning to look and research around the areas of Fort Smith, AK,  Cleveland, TN and Ownsboroo, KYRental regulations in Ohio can vary a lot from city to city, with Cleveland being the most heavily regulated.

I find trying to slog my way through government regulations to be a bit overwhelming.

Borrowers can acquire a primary residence from up to 1-4 units for as low as 5% with conventional, as the regulation was approved last year of November 2023.

@Don Owens My 9-5 job revolves around Indiana water regulation and well installation.

Depository institutions are highly regulated in the risk they bear because they lend out their depositors' money.

I'm not against innovation but every point you raise is pre-existing or illegal/ against regulations. 

FHA appraisals are very strict.