I'm extremely grateful to have a community of real estate investors to reach out to for help.

and if you can't get approved for a conventional loan, you may be eligible for a DSCR loan.with that said... i am extremely skeptical that you can cash flow $500 a month including the debt service on the mortgage AND the HELOC plus all the expenses. 

Their rates are extremely high for new investors compared to other hard money lenders, and they include a lot of junk fees. 

So I pulled the trigger

A serious, no-nonsense buyer should totally consider this.Interestingly, most of the people who pursue this route with us are extremely analytical types: quants at hedge funds, engineers, accountants, lawyers, etc...

@Stetson Oates, Thanks, and you are right, market conditions would limit how much of the initial funds one would be able to withdraw.I should also add that, while I am not an accountant or tax professional, it appears that at no time in the strategy above would one trigger a taxable event, since you're not selling any stocks or property. 

Just because you add an ADU doesn’t mean it’s going to add enough value to recapture that $300K.If it sounds slightly out of your comfort zone a simple conversation can be extremely impactful Thats where breaking down the payment management tools, local experts on small repairs, credit and background checks for renters, all comes into play.

I don't know anyone or anything about the area but we are willing to pull the trigger.

Most lawyers are extremely risk averse. 

I like to think of myself as more of an investor than an agent and I like to treat my clients the same way I run my own numbers (which is extremely conservative, I like to sleep at night).