This can often be a great "investment" if you plan on staying a long time in your house.An interest rate cap is only good for 3 years, and, specific to this loan, it is interest only.  

You did a great job on most of the details but it looks like the floor plan you started with is now the issue and is not really correctable.Looking at the Zillow map of the area, I see very few houses over $400K and most around you are about $100K+ under yours. 

We are a community of real estate investors and professionals dedicated to assisting RE investors with tax planning, entity formation, and understanding tax implications.

So, I would keep your 2-year plan to yourself.

Put them on a mortgage ready plan to be ready to cash out within two years.

The plan was to gain more experience with a few more lower maintenance type single family deals before moving beyond that.I definitely don't understand the multifamily market, looking around, it looks extremely overpriced.

Plan to rent main house (2500sq ft) long term and MTR the ADU.

I was having a little trouble parsing your plans from the current post. 

@Lisa Paolella everything exactly as planned so far on the multi family value add.

The investment plan can be tailored to your risk profile.