Here in the US you are taxed on the net, as you can deduct mortgage interest or any repairs you might do.

I doubt it would qualify for a conventional loan with the repairs that need to be completed.

There are also 'mezz' lenders (typically for larger transactions) who will cover up to 90% CLTV and require you to bring the remaining equity to the deal, and additionally there is Gap Funding in the form of unsecured personal debt.The latter can potentially be the most expensive option, but allows for true 100% financing as there are no restrictions for how to use these funds, as they are unsecured, and generally obtained through personal credit, income etc (since there is no collateral for obtaining these funds).

@Chris Seveney I'm concerned about having $$$ for repairs when needed.

Companies typically last only ten years on average.

The reality is the land has value.I believe you are typically far better purchasing a different property with conventional financing than adding an ADU.  

Typically, we see anywhere from $600 to over $1000 per unit (maintenance and turn costs)  depending on these factors. 

----------------------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

If you hire a PM, they typically charge 15~25% of the gross.

That is not something you typically can charge an owner on an owner finance deal. 2.