Initial Financing: Used a hard money loan (HML) with 10% down, interest-only at 10.95% for 1 year.

And they execute their investment strategy/model (develop, resell, hold, etc.) effectively to generate a return and/or equity and make a living.

This initial negative equity position consumes the initial cash flow.  2) the addition of the adu makes the property multi family and likely makes rent control apply.  

It sounds like you have an un-permitted unit, which is essentially always a risk since there has been no notice to the AHJ that it exists and they can therefore initiate a code case to have it removed in most cases.

I've had a long career in community development and have a lot of bank contacts that would likely be interested in investing, but I'd need to prove the concept first with an initial fund (there are also a lot of other community development tools that could be leveraged to maximize and scale this).

Issue:  computer-generated random phone numbers for outgoing calls. 

Most people I know start with low money down programs so they can get away with a initial capital investment of around $25k but you also need reserves.  

My avatar guests are multiple generational family groups, and often the grandparents are the ones to book.  

Must be nice that those “crimes” deserve so much attention.It is my belief that most RE investors are best served initially investing near their home.

Once I've completed these initial projects and built up some capital, my long-term goal is to transition into buy-and-hold investments in potentially more affordable markets to maximize cash flow and scale up.Right now, I'm particularly interested in investing locally here in the Seattle metro area.