Maybe it's a way to build generational wealth by having a tenant pay down the principal every month? 

Great discussion you generated here for those looking to learn more about cash-out refinances.

I shifted to a small new home build and it generates nice monthly cash flow and equity since.I wish you all the best.

This appreciation was a testament to the thoughtful improvements and strategic management that went into the investment.The Outcome:Today, the property not only stands as a valuable asset but also generates a robust monthly cash flow of $2,500.

Therefore the property types that are the most favorable to generate bonus depreciation will be those with a high degree of what the tax code refers to as "land improvements". 

Is now a good time to spend your $100K on the first random property you find just to "do a deal"?  

The purpose of this test is to ensure that the property generates enough rental income to cover the property's mortgage payment, including principal, interest, taxes, insurance, and homeowners association dues (if applicable).Key Points of the FHA Self-Sufficiency Test:Applicable Properties: The self-sufficiency test applies only to 3- or 4-unit properties being purchased or refinanced with an FHA loan.

Depends on how much capital you're trapping to generate that return. 

During this time you are not generating any return from the money invested in the ADU.

While they are indeed somewhat arbitrary, they provide a straightforward framework to filter out properties that are unlikely to meet my investment criteria.1% Rule: This rule helps ensure that the property generates sufficient rental income relative to its purchase price.