I happen to be looking for gap funders myself for a number of my house flip projects in Houston, TX and finding gap funders or any kind of private money involves a lot of networking and putting myself out there to meet potential lenders.

In the case of GEG, we let our members know we did not have a track record with them - they were new to us and just being tested - and therefore it was even more important to perform thorough due diligence since we can't be involved in the transaction. 

Leverage magnifies return. 3) The effort involved in adding an ADU is comparable or larger than a rehab associated with a BRRRR.

Yet, too many of those posting advice for you have no clue on the risks they are advising you to take.You're pinching pennies to save $8k with 3 kids. - What would happen if you lost it all?

RE is a lot more active and involved, even if you hire a PM and a GC which BTW eats up your returns.

Risk of being the 1, right?

this deal seems like a lot of risk and I am interested to seeing how it turned out.The tenants were a few weeks away from the foreclosure auction.

I'm not completely foreign to the construction process as I grew up around a family that was involved in home building, but due to living in another state I can't really lean on them for the direct, hands-on guidance. 

There is less risk involved in the cheaper properties .

That's right, only those willing to compromise.This is also why many so-called "creative financing" deals often involve low-quality properties.