without getting into the question of any particular real estate 'personality's" success, or lack thereof, I can unequivocally state that the "rules" change in each differing economy.  

@Aaron Davis My personal experience is that non section 8 tenants don't play well with section 8 tenants.Frank

If you are using a DSCR loan, your personal DTI will not matter.

If the ADU you're proposing is the make-or-break between this deal penciling out or not, AND if it is pivotal for your plans that it be the height that you are planning, I would personally advise you to abandon this deal. 

@Rob WallaceCredit unions typically do not lend to LLC’s I will focus on another topic - I strongly recommend your operating agreement have terms preset if things personally go bad and one has to buy the other out.

In this case, it would make sense for me to get the permit as an owner-builder and I'd save $, but I'm inexperienced. 

These are advantageous as they look mostly at the asset's for the loan not necessarily your personal statements as much as conventional loans. 

I can see why the landlord wants to use their person . . . they probably want to make sure its a quality repair. 

You will need 20-25% down and a commercial loan for the rest.Most lenders will want to lend to an LLC with you personally guaranteeing the loan.Typically, each MFR would be purchased under its own LLC, for liability purposes.Each LLC would then also need its own bank accounts for collecting rents and paying expenses.

I have personally never heard of the county having any say .. other than I do get calls from (state of Colorado) Tax collector after I purchase something and they want to know why we paid less than market value.. but they contact after the fact..