That is a recipe for disaster, and if it gets around there are hundreds of people that will provide him compelling ways to lose it all in "good" investments.Alas, financial self-education is something that is hard-won and severely lacking in this country.  

I also get the same story from national lenders that state virtually everywhere ADUs are getting values far less than hands off costs.  

It's a good time to start exploring your loan options and setting yourself up to search alerts so that you can become familiar with the area, and start running the numbers :) it's a little harder to cash flow in the north side, but the appreciation is quite significant. 

@Craig Curelop is a great resource to assist with this as he is in Denver and wrote the book on house hacking for BP.You are a little numbers heavy vs. expectations meaning that it seems like you are really counting on these numbers to work and they could be tight which can be scary for a first property.

@DeAnn Haff, how has it been going with Anderson and what services are they providing you?

Hey what are you going to do with that lot, or you know it is landlocked, or you know it is unbuildable, or you know that is under water, or whatever? 

Specialized policies, contractor recommendations, tenant screening, lease agreements, utilities, and exit strategies are also important.Good luck!

I'm struggling to find a good example that doesn't involve shared laundry.  

Mine are all in pretty good neighborhoods that are very walkable.

Their cap rate is based (among other things) on the current property taxes that they pay.