If the ADU you're proposing is the make-or-break between this deal penciling out or not, AND if it is pivotal for your plans that it be the height that you are planning, I would personally advise you to abandon this deal. 

I personally would give all of my complaints and responses to prospective tenants, but whether that would protect you from liability I have no idea.might want to contact your local newspaper about the lack of city response. 

@Rob WallaceCredit unions typically do not lend to LLC’s I will focus on another topic - I strongly recommend your operating agreement have terms preset if things personally go bad and one has to buy the other out.

Your response back is very much appreciated.

I PERSONALLY feel the attorney should be neutral and alert me to red flags and lay out my options.I 100% understand why my real estate AGENT would push me, so ...

These are advantageous as they look mostly at the asset's for the loan not necessarily your personal statements as much as conventional loans. 

We like this saying in our company, "if you don't ask the right questions, you won't get the right answers".It applies here because you're asking a very vague question - so, how good & specific do you expect the responses to be?

You will need 20-25% down and a commercial loan for the rest.Most lenders will want to lend to an LLC with you personally guaranteeing the loan.Typically, each MFR would be purchased under its own LLC, for liability purposes.Each LLC would then also need its own bank accounts for collecting rents and paying expenses.

Together, this structure will protect you personally from lawsuits, as well as keeping your investment properties isolated should legal problems come up down the road.

I have personally never heard of the county having any say .. other than I do get calls from (state of Colorado) Tax collector after I purchase something and they want to know why we paid less than market value.. but they contact after the fact..