But if I rent out rooms, when does the property fall under the prevue of the ADU laws? 

Impressive Rent-to-Price Ratios: Average rents for 3-bed homes are about $800-$900/month, potentially yielding 12-15% gross returns.Economic Transition: While historically industrial, Bay City is diversifying into healthcare, education, and service sectors.Revitalization Efforts: Downtown redevelopment and community initiatives are breathing new life into the city.Strong Cash Flow Potential: Low property taxes and insurance costs contribute to robust monthly cash flows.Let's crunch some numbers on a hypothetical deal:Purchase Price: $75,000Down Payment (20%): $15,000Mortgage (4.5% interest, 30-year fixed): $304/monthProperty Tax: $100/monthInsurance: $60/monthEstimated Repairs/CapEx: $100/monthProperty Management (10%): $85/monthTotal Monthly Expenses: $649Potential Rent: $850/monthEstimated Monthly Cash Flow: $201Cash-on-Cash Return: About 16.08% (not including appreciation or tax benefits)These are rough estimates, and individual properties will vary.

The previous owner added some square footage to the house without a permit.

Also, they use examples where properties are selling for $500K and up which is not where many of us are investing.  

I source off market distressed properties here in the Jacksonville market.

We got success on Lake Properties here in the Bay Area, let me know if you like to talk about it.

My plan is to use the LLC to acquire properties and to be the employer for the property manager when I actually acquire some walls and a roof besides my own personal home.

The two years consisted of negotiations with the land-owners, site tests, city planner meetings, city commission meetings, etc.

I’m looking to learn more about HAP contracts and HUD for a property I’m acquiring. 

(Just make sure you can pay them back and know banks don't want you to put a second on the property, but also won't check.)