There are a multitude of ways this would go wrong.Adding habitable structures and attached sq footage to dwellings with no permit is very risky, and your asking for nothing but problems down the road. 

Any business model that is offering solutions to people that the credit scoring industry has labeled as "risky" is having to build in a risk hedge somewhere. 

Would they view it as more risky than long-term? 

I heard about it many times in the past but was hesitate to learn about it as it looked highly risky and competitive (you don’t get to do inspections, buy as-is, can’t enter the house until after you buy it, and so on).

Who knows if we are at the top of the market but it sounds like a risky move going that big. 

Biggest risk is if you have one of the 10 go south, you put the 9 others at risk.

Is renting that house could be risky if the tenants are not responsible?

I chose risky projects with very high cash on cash returns and held until they were stable and attractive for the next buyer.

City council members are so gun shy when it comes to adding more housing for renters that they find even this too politically risky and have been dragging their feet. 

They had a bad experience with a realtor in the past although they didn't completely shoot down my value proposition.