I believe that the technically correct answer is that they all moved from California to Texas and Florida, whereupon they realized that it gets extremely hot and humid in those places, has extremely variable weather, and large insects, and are now leaving Texas and Florida. 

Even if you rent at a break even or slight loss, if you could have 3 years of rental income offsetting your mortgage while realizing 3-6% appreciation, could be worth it, especially if you think appreciating for this area will exceed national averages.

However, as we delved deeper into the project, we realized that a complete remodel would be more beneficial.

However, as we delved deeper into the project, we realized that a complete remodel would be more beneficial.

I think the ultimate situation for what I described above (not the plan, but a possible outcome) could look like this:Rent main house by the rooms while constructing ADU.

He ultimately refi’d into a loan that felt hefty at first, but it freed him up to add another unit in the building.

Advice is for you to do this for another 5+ yrs to go through some real ups and downs to get a better sense of realized cash flows (net turnovers, evictions, capital events, etc). 

While not my main area of practice I represented a Brooklyn credit union lender, some buyers/sellers and a few landlords in real estate transactions and rent arrears cases.While we had successes and some failures along the way I ultimately concluded that I wanted to do something different with my life and cashed out of the business.

What your deal would ultimately entail is a buyer who trusts you enough to give you $125k and trust you to pay it back while his property is encumbered by both your seller finance note and your original mortgage for $125k.

However, one side fails to realize that by artificially constraining the lot rent of a community, the owner is perpetuating the community’s eventual demise.