@Matthew Forrest this is a new law for us here in CA so there is still some ambiguity in the process.The lenders we use are saying that they will lend based on the new income (as long as the ADUs are permitted) and essentially count the ADUs as normal units. 

Bank fees also matter, the #1 retail mortgage bank in the country advertises rates with about 2 points in junk fees ($10k in extra fees on a $500k loan on top of normal closing costs). 

I'm completely speculating here, but for example- they detected the presence of an underground septic tank in an area normally known for city sewer connections, and felt incapable of testing that specific component to their satisfaction. 

Gathering the knowledge and confidence to feel like it's an investment decision rather than a gamble is the part I need to overcome. 

They have not done a consolidation as they will not get approved and his father has a gambling problem. 

Is this normal?

I'd gamble it's one of our highest ROI systems. 

-Current tenets do not have the best credit-tenets do not have 20% down payment-If I increased rent to the max $1250 i see them moving I would like to sell to the existing renters to reduce the sales fees and the head ache of having to list and move them out to paint, replace carpet, etc, plus they are really good peopleIm seeing my options as:1: Normal sale...and move them out(realtor said not to many investors in the area are paying $225k for a $1100 a month profit)2: offer to them and hope they can figure out traditional financing 3:?????

Deviate from your normal investment mindset - and start thinking creatively house you can get into the game by hacking your current living situation, or investment strategy.

You're not including repairs, CapEx, vacancy, or management in your rental analysis.Besides the normal condo caveats, I'd be worried that this is an appreciation-only play.