Additionally, there typically are additional state protections (outside of the agreement) based on where the fund is located.

I pull permits for removal of load bearing walls, addition of bathrooms or bedrooms, addition of footage.

If you can add a legal ADU at $25k in the Austin area then you should add it.  

Considering that, you are likely going to see appreciation year over year, which essentially will be additional equity you'd capture just by simply living in the home. 

What does a cash positive investment mean to you? 

Be careful about feeding additional capital into syndicates with short-term loan maturities if the only plan is to negotiate lender maturity extensions for another year. 

The 1031 positions the investor into a property that the REIT absorbs as @Joe Sera said in the 721 conversion. 

I’m in the San Diego area and my husband and I are adding 2 additional rental units to our property. 

Like Devin said, double digit rates and you could still have fees similar to a first position mortgage.

Additionally, if your goal is to maximize personal financial benefits, consider profit distributions from the property-owning LLC, which may provide tax flexibility depending on your situation.By adhering to FMV, maintaining proper documentation, and structuring the lease agreement carefully, you can optimize tax benefits while staying compliant.This post does not create a CPA-Client relationship.