Many months of costly vacancy, local market rent & resale deteriation, special assessments, property taxes and maintanance fees suggest a quick sale would have been the wise thing to do 2 years ago.

It will depend on your goals (leave a large inheritance versus spending your money over your lifetime) but your portfolio likely will be generating average returns in the 6-8% range while retired and if you're only withdrawing 4%, even after factoring in inflation you're really not spending down your nest egg.

After inspections and close to closing our refi, they msged me saying they changed their metrics and will no longer approve our refi.

However, I really do need some cash after a few unexpected life twists, and this property has a bunch of cash tied up in it.

But it had been for sale on the market since July, 2024. 

They withdrew this service in 2012.

However, that made getting the ADU done within 180 days of the ORIGINAL sale of the relinquished property difficult.

$6K in taxes and expense vs $17K in Federal and State taxes.Ok so after all this, book a consultation with a tax advisor.

In theory it would be wonderful to get mortgages at 3.5% down and search for value-add deals to near break even on cashflow after year 1-2, banking on appreciation from a highly-leveraged investment in a growing economy.

Even if you have a higher return in the stock market, you'd be doing it with a lower basis after tax and it will take a long while to recoup from that.