Just be sure to check with your county zoning board regarding any additional requirements when increasing the number of beds.For example, you may be required to install a commercial fire suppression system, or you may have to adhere to Americans with Disabilities Act (ADA) standards, which might involve widening all doorways for wheelchair access and providing ramps at all entrances and exits.These costs could easily blow your rehab budget.Also, whatever guidance you get from the county, I'd make sure it was in writing, to prevent misunderstandings in the future!

I think many could misunderstand exactly what top 5% means.

well i think you misunderstand my position.. rental game is fine and i understand that most that is what they can do given the way our financial system is here in the US.My caution is for those thinking they can buy rentals in high risk areas and think they are going to have some great financial freedom.the issue being is most never get past one 2 or 3 rentals. and with out signficant scale then yes i think there are better investments than rentals at that small scale. and or certianly less risk.. but I firmly understand i am in the minority thought process here on BP.. :) So for someone with 20 to 30k I see being profesionally managed interest in a reit as far less risk than buying a low end rental half awya across the US..

I honestly believe that no one sets out to become a slumlord, but that it is the logical result of misunderstanding our market.

He admitted to misunderstanding a reg on an article a couple of years ago I'm not sure if it was this one. 

I would think if you bought low and forced some appreciation then refinanced, you wouldn't need to pump cash into the mortgage to do what you describe.Unless I'm misunderstanding you...I'm interested in BRRRR since buying retail doesn't make sense to me. 

@Beth Lugo - all of that said, do not misunderstand my comments.

Or am I misunderstanding something entirely?

Don't misunderstand me, I totally think it is a huge mistake to just rely on Airbnb liability coverage.

@Amir B. ...this is a complex one...there seems to be some good stuff, and some bad stuff here...The good:It's a B neighborhoodYou had a tenant stay over 5 years (which is usually a good sign)It sounds like the property has appreciatedIt sounds like you can get a PM to manage it for youThe bad:it's vacantyou have some looming capex (though, if all it is is a $4-6k to waterproof the basement, that might not be the end of the world)you seem to be misunderstanding gross vs. net rent income, and you also seem to be misunderstanding the principles of using leverage/debt in real estate (regardless of what you decide to do with this property, you'll want to study up on these topics) you paid off a mortgage that was locked at a low rate, and now rates are substantially higherYou have a LOT of money tied up in this propertyThe market is falling in most areas, and cash buyers are already finding good opportunities (and they will probably see even better opportunities over the next 6-12 months)...if you can get cash out of this property and use it to buy another property (or invest it elsewhere), that might be a viable course of action, but you'll want to run your numbers carefully...