Before all that, though, the purchase price looks suspect.  

I suspect you will be negatively surprised by the development costs and the associated added value.  

I am leery of JADUs due to the OO requirement, but I suspect there is also risk from a financing perspective.

However, I suspect your zoning does not allow the duplex in which case the ADU is the better option. 

I suspect the damages are major if you can’t even meet lending requirements.

Some things that caught my attention are:1) Half of the roof was replaced two years ago, the other was replaced 7.5 years ago2) House will need a new furnace3) Suspected that a column has settled in the crawl space.

that's funny brah, but you were singing a different tune on this thread:  https://www.biggerpockets.com/forums/311/topics/26...Care to reconcile -;)I am HAPPY to be proven wrong by someone making something work that I might have suspected would be improbable. :)Any rule of thumb is going to have examples of folks doing the opposite and succeeding.

I would be suspect of your agents opinion that yhou can sell and the home fell by 50% because of one bad house.. now I can see it takes longer to sell. but that seems extreme to me.Just go to Charleston SC  I have built and sold 500k homes sitting next to dumps that were ready to fall over... and here in Portland same thing you can have brand new next to junk and it does not affect value. 

Quote from @Atul Mohlajee: I suspect it's a sewing machine, a foot massager, or some other innocent device.

Without getting too salesy in the forums (to avoid restrictions from BP admins) I'd say 80% LTV is somewhat widely available for DSCR on more or less turnkey purchases (pending debt coverage) although I suspect some loan officer could chime in saying they can do 85% DSCR (won't debt cover at today's rates in 99% of cases especially with property taxes in TX but this is a fairly common "blowing of smoke" I see here in the forums).