I want the next value add to be an ADU addition, but the appraisals are undervaluing the ADUs so refinance to extract capital seems unlikely. 

However, he wants to keep the whole $500k so we have to get our hands dirty to extract the equity.

Hi Matt, I agree with the comments above I'm sure you've already done this in your research, but I would definitely check the comps and see what you can extract from that.

Are they extracting the items to be depreciated from just the FixedAsset schedule?

Just as a heads up as not sure which timeframe of BP podcasts, but before covid you could do a BRRRR and get all your money back out of the deal, today that is typically not the case and you will still have money in the deal - so just wanted to mention that.Lastly, you are way ahead of me and many others already as I cannot swing a hammer :) In my market I believe I can still potentially extract all investment, but after the high LTV REFI, it would have very significant negative cash flow which was not the case for BRRRRs where refi completed prior to 2022. 

I know I can extract cash flow from the property even though the interest rate is not that good i can still cash flow some money and refinance in the future.

A long-term hold in those locations will net you great profits decades later. so much so that you'll be able to extract the equity when you need it and not be worried too much about the capital gains because the gains are so great.

However if I do a BRRRR I can achieve infinite return by extracting all of my investment.

You can go do the same thing and extract all the value.It's why you ****ing invest.

For instance:At 0°F, a 36,000 BTU heat pump might still deliver close to its full capacity, around 37,000 BTUs.At -4°F, the capacity might decrease slightly to about 35,800 BTUs.At -13°F, the capacity could further drop to around 32,000 BTUs.At -22°F, you might only get about 28,000 BTUs.This reduction in capacity occurs because, as the outdoor temperature decreases, the heat pump has to work harder to extract heat from the air, which becomes more challenging as it gets colder.