This is a basic layout of what's happening in my head, but I'm wondering if I'm oversimplifying things:At Year 0:Value - $150,000Debt - $100,000Equity - $50,000At Year 1:Value - $156,000 (assuming 4% appreciation)Debt - $98,653 (30 yr. @ 5.50%)Equity - $57,347At Year 2:Value - $162,240 (again assuming 4% appreciation)Debt - $97,230Equity - $65,010My question is, is it possible at the end of year 2 to expect to be able to cash-out refi at ~80% of the equity ($52,008) I have in the property and recoup my original investment?

Especially if you're moving or tearing down walls or re-configuring an entire layout.- Do you hire a general contractor to manage the job?

He suggested that I build them with a layout so some day they could be converted into SFR if I needed to sell.   

OR Gut the 1000 sq ft and change layout to modern SFH and rent it out or sell it.

If the borrower lied, it would be a criminal act and while there is no statute that I'm aware of that says it's against the law to do a lease option/lease back, there are statutes that say its against the law to make fraudulent attestations/statements on a loan/short sale to a federally regulated financial intuition.

So things like not picking certain materials early, making sure that certain jobs didn't happen too early (like painting) and mapping out layouts so that we don't have to reconfigure a space because the refrigerator was too big.      

Buliding smells, everything is dated from applicances to the layout to the paint. 

The single family home will have to have it's layout completely redone.

With it being a 3/2 already at 1300 sq ft, I don't know that adding a bedroom or a bathroom would get you a lot of bang for your buck, unless the layout of the house is conducive to easily adding those. 

Their contacts & market intuition was the reason I achieved a VERY high 6 figure profit in just their market area.RIP Bill & Ann!!!