Since it has been your homestead, you can sell the property, pocket the gain without paying capital gains.

My struggle is raising capital.

Generally, for the optimal refinance, these are top of mind for BRRRR strategy investors:Return of capital: The key “secret sauce” of the BRRRR method is to build portfolios using the same capital over and over—which relies on getting your basis (or more) back on the refinance, where basis refers to the money you invested in the property (down payment and cash used for renovations).Speed: Refinance lenders use the term “seasoning” to refer to the amount of time (typically in months) between the purchase of the property and the refinance.

Pass-through costs: In some rent control systems, certain maintenance or capital improvements can justify rent increases (subject to approval). 5.

Capital improvements (I call this my WIP, which stands for work in progress).

That way you don't risk any of your own capital, but get a chance to learn and observe first hand, so when you're ready to invest, you're way ahead of the game. 

With a favorable market and minimal improvements needed, we saw a profitable opportunity to capitalize on the high demand in the area.

We utilized our capital to cover the purchase cost, ensuring a smooth and expedited transaction.

Is this a Capital expenditure or an operating expense?

Although my cost of capital was cheap (2.5% 30yr fixed), the increased STR supply resulted in a more hands-on approach by me (better marketing, improving the quality of my check-in hose, services, etc) and this wasn't turning out to be as 'passive' as I would have liked (I've been managing my own LTRs for close to a decade, so perhaps I'm spoiled).