I ran a AVM on it comes to $166000 which won't account for anything special upgrades. $123500 isn't going to get all you invested back, and there will surely be a prepay penalty as lenders think you will continue to try and sell. 

If the property contains a residential structure, the former must also pay the value of "preservation improvements" made by the investor, but not additions or upgrades.  

There is a reason high value hotels constantly invest in upgrades and redesign, as well as high quality furnishings that can take the wear and tear of high volume usage. 

If you do eventually upgrade to an ADU, you will want a separate meter, so if you could put it in now, would that be something you would do?

Activities such as appealing assessed values, shopping for cheaper utility providers, shopping for cheaper insurance, or even energy efficiency upgrades are all on the table.

A lender will be able to speak to specifics, but it might help with achieving any needed upgrades.

just to be clear here.. if all other townhomes are 250k then it wouldn't be worth 350k.. you cant make value go up.. there has to be comparable sales.. so if there are other updated townhomes going for 300k or so then you could upgrade and get similar.. but value is only supported by comps.. you never want to be most expensive in neighborhood.

Home was overpriced, I negotiated against listing agent to a much lower than asking price and invested very little on cosmetic upgrades.

The forgettable $175 ADR listings will struggle but high end and eco are doing well. 

We are upgrading with Luxury Vinyl Plank (LVP) flooring, this is an appraisal point and they last longer than the standard flooring, The extras windows (free), granite countertops because once again it helps with appraisal but also last a long time and they check a box for renters, and a few layout modifications that i believe add more value and let the units work better given the site layout.