Hold it for 20 years and rents will be double what they are today, the home will appreciate to twice what it is today, and you'll win.

Then they move into your spare bedroom).Now keep in mind when doing a 1031 exchange, in order to defer all of the tax you must purchase at least as much as you sold or greater.

An example where this could be used is if you have not increased rent on a 1 bedroom apartment (presumably because of local rent control)  and they are currently paying $500, you could petition to raise the rent to the FMV which would be (hypothetically) $1,500.You would have to talk to the RAP board to get more details about how they determine FMV.

I would double check with the country recorders and see if in fact the property changed ownership..

That's a solid double bang for your buck!

When looking for a place, look at the sizes of the bedrooms, the lay out and number of bathrooms. 

Yes you are 100% right about adding bedrooms to the units.

The county tells me I could add up to 3 ADU's, one in the basement (at the same time as replacing the foundation) and two detached ADU's.Adding any number of ADU's has the potential to double my current cash flow.  

Now I want to update or amend the lease to a DOUBLE NET LEASE to reduce my expenses. 

Cash invested: $2,000 I am currently working on an inherited property, so that I can rent my home out. 4 Bedroom 2 full bath. 900+ sq/ft Full brick home.Currently rehabbing this house.