From my analysis—even with very conservative numbers—it looks like a cash cow.

However I like to run my numbers conservatively and account for cap ex, vacancy, maintenance reserves 10/5-7/5-7% respectively.

This negative equity position is one of many reasons that adding ADUs in a single family zone is not typically a good RE investment.OP whatever you decide to invest in, make sure you do thorough and conservative underwriting. good luck You’re right in that the level of underwriting I presented wasn’t institutional level - but for your average person just starting out, institutional grade analysis often makes the thought of investing overwhelming.

But balance is key—keeping some cash reserves for unexpected expenses is critical.Lastly, I’d recommend running detailed numbers to ensure the property cash flows well, even with conservative estimates.

I'm a very conservative investor and may look through a hundred deals a month, and at the end of the year only invest in 4-5.

Conservatively speaking, we probably own $70k in equity in the duplex and $50k in our own home.In the limited research I've done, a HELOC seems like an ideal form of financing a BRRRR property.

This increased demand is in areas that all ready have limited supply.Since the rates started to rise, my appreciation forecast has been conservative (as I have indicated in numerous posts) for my San Diego market (I have been underwriting at zero appreciation near term) and fortunately for me the market out performed my forecast.  

. $20k appreciation (based on 3% which is conservative, 4-5% is the historical average).

I would just take into account that a lower down payment will mean a higher monthly payment so be sure to run the numbers conservatively in order to ensure your STR revenue is able to carry your monthly payment with this higher mortgage cost. 

Then: 1,000 acres at $500.  1 year with an excavator putting in water conservation systems.