As for foreclosure, yes, the debt might go away, but it would wreck your credit and make it tough to borrow in the future, so that’s not a great fallback.

Taxes on the original gains are deferred until December 31, 2026, and future gains from the OZ property can be tax-free if held for 10+ years.

I would recommend looking at a loan with a short prepayment penalty if looking to get cash out, that way you can refinance again if rates drop again in the near future. 

I'm not sure I would get to cute trying to squeeze every time out of it now with a lease that might cause you issues in the future, but the scenario you describe is common and probably smart. 

Generally, lenders base their refinance valuations on the property’s in-place income and existing condition, not future projections.

@Bill B. yes a good AI platform will keep a DNC list and or scrub for DNC and prevent communication from happening in the future. 

We'd even be happy to move them into one of our (future) properties and just let them keep all/most of their rent income as free cashflow. 

@John Kirtley It's definitely gone up a lot in value, but you can compare the values to Folly or Isle of Palms (Sullivans isn't really comparable) to see the future growth.

Would the 9-year balloon concern you, knowing you'd need to refinance or pay off the balance at potentially higher market rates in the future?

Just in case.Ultimately whatever correlates with your future plans but a solid way to build long term wealth.