I've not used your approach myself.

Developing that trust with someone you don't know may seem like a challenge, but if you approach it correctly, you should be able to achieve a pretty solid foundation of trust.The best way is to talk to others who have had an experience investing with the sponsor already.

Or what is best approach to getting approved for a mortgage when it comes to charge off's and collections?

Our team uses a conservative approach in our underwriting.

@Angel CraigYou've got the correct initial strategy - the most cost-effective approach would be to secure a low down-payment loan (e.g.

The location is very good with many small apartment and condo buildings being completed over the past several years, suggesting that this could be a better approach than the ADU option. 

@Jeff Bethke - if you have plans for the equity and an approach to pay the money back, take out a HELOC. 

Your broker may have forgotten, but when the appraiser reports back to the lender that it is a rooming house, the lender will walk away or only underwrite an LTV of 50-65%.Your best bet is either a private lender or finding a conventional lender which uses auto-approval software (TD is an example) and mortgage agent/broker who can steer you towards an application that qualifies for auto-approval (if at all possible).When we were first in the same situation, we approached a family member with a proposal to have their name on title and live in the house (rent and utilities free) in exchange for their serving as the Den Mother to keep the house in order.  

I understand it's not a 'one size fits all' approach, it's just to give you another perspective on other possibilities while you decide whether to househack or not.

How are you approaching the pricing?