. - was thinking of asking for 3 months worth of bank statements to get a sense of their average daily balance -- too strict or not enough?

One being for strictly addresses and no skip tracing.

I feel awful getting turned down because the strict requirements for government money.

Do the properties appreciate or are you strictly buying for Cash Flow.

I see there is a safe harbor for routine maintenance, which I would argue most of the repairs fall under, but I don't know how much the IRS is going to nitpick if something should be capitalized or not.  

. = if I'm using the BRRRR method, what are the pros/cons of hard money lender vs, a loan from a local bank.Think of hard money lenders as your loan shark with higher points but may or may not require strict stipulations unlike a conventional loan which is usually what you get from a local bank.

Strictly from the business side it would make the most sense to just hire your friend or another contractor to do the work. 

I'm up for an ADU but I know only specific areas allow this and some of the rules can be pretty strict.

I will absolutely take into consideration your advice for being steadfast about having strict house rules in order to ensure that my tenants are mindful about treating the property with care.

Rochester has a C of O program, and a lead paint test program that are fairly strict to ensure safe housing for all tenants.