The fact that you’re now considering the next steps with equity is a sign that you're ready to level up, but it's also crucial to be strategic about it.In terms of pulling out $500,000 of equity for new investments, there are a couple of key factors to weigh.

Market Research: What factors did you consider when determining the potential resale value?

As a lender our minimum loan size is $50,000, but as a loan design for repairing properties the minimum loan size does not have to be met at purchase.

BiggerPockets is full of resources designed to help you along your journey, whether you are just getting started or a seasoned investor.

Big Money investors buying all kinds of property south of downtown and West of downtown in design district. 

What creative features or designs have you seen that made a property pop in this competitive market?

However, smaller properties tend to have asking prices influenced by factors like local demand or future appreciation potential, not just rental income.If you're finding that the numbers from the cap rate approach are consistently coming up lower than the asking price, it may be because the market value is being driven by different factors, especially in a competitive or appreciating area.I’d recommend using comparable sales as your primary tool while keeping the income approach in the back of your mind to avoid overpaying.

Regs can run the gamut:  STR licenses are unlimited and available immediately with no restrictions, STRs can only be rented so many nights/ stays a year, STRs can only be in designated areas, the number of STRs are capped and there is a waitlist for a license.As others have mentioned, typically an unregulated STR will have more revenue than a LTR, but it will require more consistent work and effort.  

They include: zoning requirements, building codes, impact fees, permitting requirements, design standards, public land requirements, and federal Occupational Safety and Health Administration regulations and other labor requirements.

Based on comps, you could sell for $275K to $300K, leaving little profit once you factor in holding and closing costs.The conversion to a 4/2 near a university is promising, but the risk lies in unexpected renovation costs or market shifts.