Scenario 1: 5/1 ARMRate: 5.675%Monthly Payment: $5100Prepayment Penalty: 3/2/1Closing Cost: Broker Fees: $11,016 (1.25%)Lender Fees: ~$2,000Loan Fees: $600Plus standard title and other feesScenario 2: 30 year fixedRate: 7.375%Monthly Payment: $6086Prepayment Penalty: 5/4/3/2/1Closing Cost: Broker Fees: $11,016 (1.25%)Lender Fees: ~$2,000Loan Fees: $0Plus standard title and other fees5/1 ARM looks attractive but not sure if that's what other people opt for that for a STR property? 

I specialize in single family homes in middle class neighborhoods , working people providing a high quality product for tenants that stay for avg. 5-10 years.   

You will constantly hear of  shortcuts during construction and the conscientious decision to use lower quality materials during the renovation. 

Your returns in investing ultimately come from exchanging terminally abundant goods (fiat dollars, debt/future fiat dollars) for terminally scarce goods (high quality, supply constrained real estate).Selling to go into cash isn’t of interest unless I have a short term need for that cash or am funding another purchase.

For example, if a 1,600 sq ft main house is appraised at $100 sq/ft, what could I expect a 600 sq ft ADU of similar build quality to be appraised for?  

Notice I didn’t suggest that max retail value is the standard. 

However,Working with a good attorney will make the process easier but having a good administrative structure will be critical because there are a number of steps must be followed for compliance...which makes the SERIES LLC a little more involved in setting up your standard entity.Happy to discuss further.

No formula can be accurate across the board because even “cookie cutter” properties next store to each other differ as to view, location to the street, topography of the land, lot size, physical condition of the property, past remodeling, quality of the mechanical systems, sunlight, utility bills, past use, etc.  

Quality VAs can do anything.

I was thinking about an strategy of doing Cash Out Refinicing putting that money in the stock market (distributed in ETF and some "safer" stocks) to get around a 6% anual return (estimating that low because is the "standard" average, however my current stock portafolio has a cummulative return of 66% in the last 4 years).