Hopefully this will clear things up:You are correct with your understanding that you can't write off any costs related to inventory (the house) - whether that be the cost of the house, or items to improve the inventory (like lumber, paint, contractors, other flipping expenses).However, if the cost does not relate to the purchase or improvement of inventory (the house), it can be written off as operating costs, as you noted.

The relative would give cash as a loan to buy the land and build, and then 2 years later, you'd need to take out a real mortgage from the bank and pay back the relative.

Needless to say, my first phone call would be to Denver Zoning.I spoke to denver zoning and the size of the ADU is relative to the lot and not the primary dwelling.

Creative Financing School he he he :-) If you are really confident of your deal ... you could borrow from parents, close friends, relatives, ...etc.

I am looking at areas within Columbus to buy my second property since I want to buy in areas which I am relatively familiar.

Or, with a lawyer (who is a relative and would do it for free). 

My properties are in a lower income area and people have to have a place to live. 2 times the rent is often fine assuming they don't have a brand new car with a relative giant payment. 

Just because gold has had a (relatively) long history of staying power, mostly through European/Middle Eastern society, doesn't mean that it is inherently any more or less valuable than a flimsy piece of rag with pictures printed on it.

But to use it for qualifying income, they require those people to be related.

I've heard stories of landlords keeping deposits to cover real and actual expenses related to damages and/or a tenant breaking a lease and a judge not agreeing with that use of the deposit and awarding damages to the tenant.