the key thing for a BRRRR is: can you increase the ARV significantly enough with the rehab?

When you pay cash for a $400,000 home and rent it out, your rate of return will likely be less than 6%.You could invest in stocks and earn 7% or better.You could put the money in a high-interest savings account and earn up to 5%.I don't understand why anyone would pay cash for real estate, erasing many benefits that increase the rate of return, while exposing themselves to the risk of loss (turnover costs, bad tenants, capex, etc.). 

These modifications are carefully crafted to incorporate ADUs seamlessly, aiming for a delicate balance between increased urban density and sustained neighborhood character.

the key to a BRRRR, whether it's going to be an STR or LTR, is this:distress.you need to find a significantly distressed property, such that you can increase the ARV via the rehab. 

This will increase the return above what can be obtained on a passive investment.The flipside of having the power to control everything is that it can be alot of work (and a full-time job if a person is putting in sweat equity).

If you generate enough money annually to dismiss a W2, then consider covering the ever increasing costs of retirement & health care and those do not go at inflation metrics but usually way higher. 

It’s worth considering the trade-offs between the stability of income and the increased oversight and hoops you'll have to jump through.

A prior cost segregation study increases the depreciation taken during the owner’s lifetime, lowering taxable income each year.

So the added cashflow to property owners it they are willing to become the developer and increase density that tactic could help more owners stay than could otherwise afford to stay. 

Quote from @Noah Wright: No, but here are some ways to increase ARV most dramatically:1.