The 2-3% points in extra cost are worth it if you plan on using as I described above because the use would be for a few  months at most and due to that short term use you can survive a rate adjustment up.But, if you have no plan to payoff the debt like when using for a down payment on a long term hold why pay the extra cost for flexibility and have the additional risk of the adjustable rate with the amortization looming when you can get a fixed rate second mortgage. 

It happened to coincide with Hurrican Harvey and we flooded during the rehab. 212 extended the HM loan without any extra fees for 4 months until December 31 2017.

Most investors don’t even need an LLC and a holding company is extra, extra overkill though IMO.

So, by transferring income from a rental schedule E to a business schedule C you're creating a significant extra tax.

Then you can choose to get a roommate to make extra money.  

@Dillon Clark-don't pay extra down on your mortgage-don't use a HELOC-save up as much as you can-hope this helps

I agree with Nathan (don't forget to price running extra water, sewer and electrical lines).  

At this level of scale, it is almost the same as running an extra unit.

A key part of our team is our talented interior designer, who helps us add that extra flair to every property we touch.We’re eager to connect with local investors, agents, lenders, contractors, and anyone else who shares our passion for real estate.

Our 275 sq ft furnished garage should rent for $1600 - $1800/mo and the only extra fees compared to long term is $99/yr to post on furnishedfinders.com. ...I should have this finished by the end of next month, so can keep you updated on whether this plan works and what we rent for.