My goal is to understand the current demand and rental potential for ADUs in this part of the city, as well as the costs involved in building.

Although the cleaner is probably the most important piece to the puzzle for your STR success, there is alot more involved with managing it.

The primary form of diligence we see on the forums is "what do you think of XYZ sponsor and deal" whereas the common form of diligence in the space by institutional investors, large investment groups, family offices, and sophisticated investors involves following the sponsor for years, underwriting the deals, validating rent comps, background checks on the general partners, and a host of other diligence that materially de-risks the investments.  

In the cities the government got involved in housing and low income housing was built for poor people.

Might be a little bit confused here, but from what it sounds like you were involved in purchasing the property, renovating it and then selling it?

Investing in real estate and 1031 exchange replacement properties may not be suitable for all investors and may involve significant risks.

However, their terms involve a 20-year amortization, a 5-year ARM, and a rate of prime + 0.5% thereafter.I’m exploring other options for financing and would appreciate any suggestions or advice.

No PM, we manage at a distance with a solid cleaner and handyman. 

Alternatives to ConsiderIf you want to involve an entity for liability protection or other reasons, here are some potential approaches:Assume in Personal Name and Transfer to Entity:Assume the loan in your personal name and later transfer the property title to an entity.Important: Transferring title may violate the loan’s due-on-sale clause unless explicitly allowed by the lender.

Even someone like Brandon Turner is less and less involved in his syndications, so there's an increased risk that his syndications will not be run with his original values in place.