(Assuming zoning checks out) The additional unit would only be creating more cash for the mortgage payment so I just don't see how this could negatively affect a lender. 

I read all these articles on how Fix n Flips can be lucrative over time once you get good/fast at it.....how, when all I see is..negative net profits. 

It seems the experiences are primarily negative, but that might be a biased sample as dissatisfied people are far more likely to post online about it.

And the way it was told to me it didn’t seem like it had a negative impact but my relative moved out of the area so I don’t think they know either.

I tried to get a commercial loan and the interest rate was so high, it gave me a negative cash flow. 

You are not losing deductions, you’re just not doing it right now and going negative on your net income.

I only just started analyzing properties so I am no expert yet.

So yes, do leverage but try to get to a comfort level that in a negative scenario you dont lose everything.

I was willing to take negative cash flow because I knew that even without getting all the way to market rates immediately I could turn things around and not force out the retiree tenants in some units.Those units are still a bit behind market,  but not dangerously so.   

Once you factor in your vacancy as well, maintenance etc you might even find yourself cash flow negative.