Currently buying a duplex that needs a full gut and renovation including windows, roof, floors, hvac, plumbing, drywalling, kitchen, and bathrooms.  

While you can potentially rent-by-room, this is a really tough configuration to do that with as 3 unrelated people seldom want to share a bathroom and if they do, they expect a pretty steep discount for it.When you mentioned rental arbitrage do you mean that you're open to someone renting it from you for the purpose of using it for arbitrage? 

I mean, THE HOT WATER FAUCET IN THE BATHROOM SINK DIDN'T WORK!

Just today I get notified by property mgmt there was a leak in the upstairs unit bathroom that leaked into the downstairs so that is the next problem in a long long line of problems.So I have an interest only HELOC that is 50% used, and can’t refi anywhere in the near future and I am at negative cashflow.

Take into account: bedroom and bathroom counts, square footage of the unit, whether parking is included, whether laundry in in-unit or not or nonexistent, central air vs. window units vs. nothing, and the general condition and age of the interior.Good luck!

@Marisa VoelkelI usually pick theexit strategy primarily by the level of rehab needed:Flip - If it needsa full gut, I will just tend to flip it.BRRRR - If thereare salvageable parts (i.e. solid floors, and decent tile in the bathrooms) Iwill rehab what is needed, refi, and put a tenant in there.

-Bedroom/bathroom count.

I’m thinking of spending about $200k for renovation adding a bathroom and a pool.

I remodeled her bathroom, upgraded her kitchen a little and added central air and other things.

Then you can clean/remove the mold and the problem won't come back.The most common source of moisture is lack of ventilation in the bathrooms or condensation on windows in the winter.