When you refinance a property, it's already in service, thus no adjustment to depreciation.Special rules apply to primary residences converted to rentals.You should understand how refinancing a property will limit your ability to write off the interest.

@Chris IrvinChris, you never get in title with a lease option, you control the property.The best way to get on title is sub2 or a wrap or a land contract, now your exit strategy may be a lease w option or a lease w ROFRSee my BP blog "Make money without banks or credit."

Donald,Net worth is the same as any net: Assets - Debts.I am guessing that you want to know if the person your are financing has a pot to do their business in.Have them fill out a form 1003 (online for free) and pull a credit report.

Therefore, the 1% rule is applied to the entire purchase price, not just what's left after the down payment. 

We are applying for an ADU in San Mateo, ca. 640 sf 1 bed 1 ba.Just the permit will cost about 10 k, with all the green building, demo recycling, all kinds of bureaucracies.However, the added value is around $800/sf, or $400k ish.The actual building cost we estimate around 100k-130k.

Credits for partial month rents and security deposits at closing?  

I'd say you're close and you need more research, estimating full bath and half bath at the same price gives my thoughts a red flag that you're too green, although it is mostly accurate (but still low imo) as it evens out, but applied individually, it's dangerous at best.

Recently, the university put their interest up as collateral for a $35m bank line of credit to expand the campus.

If you have 20 units or 20 SFH you have 20 different due dates to remember, 20 times pulling out your credit card every single month. 

Until then they would continue to owe rent on the place and failure to pay will result in an eviction which will remain on their credit history for an extensive period of time.In the future it may be useful to include (if allowed in your state) an Early Termination Clause in your lease.