build a second story or invest out of state?

[Ansel Troy]

Hello fellow BP members,

I'll try to be short... My home is in Oakland, Ca. Hot market. Purchased with a 203kFHA in 2013 for 118k.. after renovation value 215k.. final price 209k. Current value 375-400k. 

i built an in-law that brings in 1000/mo via AirBnb. my mortgage is 1283/mo :)

my budget is 125k. Id like to build a second story with a private entrance. In my market it can rent for 1400.

Should i pursue the project or save money and buy out of state with cash? pros/cons?

Ive added pics of the remodeled home and AirBnb unit.