@Ngozi IwunzeOne way to avoid capital gains is to turn the flip into a rental after the rehab and then do a 1031 exchange into a more expensive property. 

We use proper and the coverage is great but really expensive at almost $5k/year. 

The general partner paid himself $1 million per year for 5 years to manage each property.

If the figure of $1200 is being floated on the listing it’s highly possible the current owner is locked in and grandfathered at this price and even if you get a policy with the same insurance company your policy will be significantly more expensive.

Using 50% rule (expenses excluding P&i is 50% of rent) here are the numbers;1800 (rent) - $900 (expenses) - 1468 (heloc) = negative $568/monthAt your rent point with that size unit, your expenses will ve less than depicted by the 50% rule, so let’s use a likely more accurate 40%1800 - 720 (expenses) - 1468 = negative $388/monthNow let’s imagine you self manage and you time is not worth anything (I strongly recommend believing your time is worth less or worth less than a quality PM would charge) with 8% further reduction so expenses are down to 32%1800 - 576 (expenses) - 1468 = negative $244/month. 

I have 35k in the bank currently, so I also could simply be over my head going for a deal this expensive.

It's stopping me from scaling to a much larger portfolio leveraged versus a smaller paid off portfolio.  

The sewer expense is a big hit.

I have one bizz partner I sold a 100 unit apartment to 18 years ago for 5 mil and he paid cash..

A hands-off garage conversion ADU is over $100, even doing much of the work yourself, it will be much more expensive than your estimate.Single ADU additions in single family zoned areas are typically one of the worse re investments.