And, yes I'm sure I am missing alot here so patience is also appreciated.This is a very common (and reasonable) place to be, especially coming from California with meaningful equity but a high cost of capital locally.

Common application fraud is to hide current landlord by claiming they "live with relatives". - This is also were we use the history of addresses on the background check.

• Common pitfalls or risks I should be watching for?

I attended the DARM (data and revenue management) conference in December, and this was a common topic in both the main and breakout sessions. 

Prohibited transactions remain the most common source of SDIRA compliance failures.

I am an agent and investor located in Texas and it is quite common for out-of-state investors who are in the best local partners and conservative numbers to succeed in this area, very particularly in the cities of Houston, San Antonio and DFW.

That's what they tell me and, after all, it's common sense.

The common paths I see are a local bank business loan or line of credit based on your income and property equity, a commercial value add loan if the building and the new space pencils with a stabilized pro forma, or a cash out refi or HELOC on other properties if you have them.

ADU's are not as common in Indianapolis, We work with several contractors that have some experience with this and would love to connect with you to discuss this.

Here are some things to keep in mind:1) Make sure you’re running truly conservative numbers - assume higher vacancies, real repair and CapEx costs, rising taxes and insurance, and rents that are realistic, not just what makes the deal look good on paper. 2) Take the time to learn local zoning, rent regulations, and code rules before you ever make an offer, especially around NYC where non-conforming or illegal units are super common and can completely derail a house hack.3) Talk to a few investor-savvy lenders early and really understand your low-down-payment options (FHA, conventional owner-occupied, grants, assistance programs) so financing doesn’t slow you down once you find a deal. 4) And finally, build relationships with an investor-friendly agent, a CPA who works with rentals, and ideally a mentor who’s just a few steps ahead of you.