@Chris Pratt Since single-family houses with ADUs are not considered commercial properties, they are not priced based on income or cap rate.

Instead of doing a 3-yr bullet you may consider making the note adjustable at 1% escalation annually past year 3.

I won't see any rents or income until after the construction phase is completed.   

Figured there would be a few data points left out of the equation' that I would need to circle back with :) .There are additional units not rented at this time which could be rented to increase the income.

Often, it will also need work.So, that is causing investors to lower their standards and buy Class C & D rentals.Problem is, most investors apply Class A assumptions to these Class C/D properties - and then blame everyone else when they don't get their "expected" results.Check out copy & paste info below for more dtails:------------------------------------------------------------------------------------------------------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?

It appears it's an income-producing property for investment.

You may be required to make estimated tax payments when the property sells.It depends on what your 2024 total taxes due were and 2025 estimated total taxes / withholding / estimated payments are.If you pay in atleast 90% of the current year tax or 100% / 110%(Depending on 2024 income), you are normally considered good.You may want to consult with an accountant for more clarification.

I require 650+ Credit, no violent crime or theft, 3X monthly income, and no prior evictions.

Eg, i have a friend/client who determines it based on income vs PITI.

As for the 5 year annualized, that’s a number we get from the bigger pockets rental analyzer.