Additionally it can often results in multiple additional tax filing requirements riving their tax filing costs up unexpectedly. 

What kind of cost per square foot are you seeing in Boise to build multi-family / townhomes?

That’s a small fraction of what all that would cost in my market.

That's three months of mortgage and utilities, the cost of flooring, and the cost of painting.

Far more costly to transfer property at a later point than simply purchase in an LLC on day one.

What type of properties are these and what do you mean by it not being "cost-effective" for you?

Costs a fraction of the funds compared to hiring a cold call agency.

So if the house is worth 300k and you owe 200k then most you could pull out would be 40k (minus costs) and it would be a second mortgage most likely which would be expensive. 7.5-9.5% likely.But, you can put as little as 15% down for a conventional loan on a single family.

I already have some equity in the property after doing a complete rehab but I don't want to diminish my returns selling it after one year, paying for commissions/closing costs.

I recently completed one on a multifamily property and found it to be a cost-effective approach.That said, there are a couple of additional factors to consider beyond the code differences between a garage conversion and new construction:Coastal Overlay Zones – If your property is in a coastal overlay, building a ground-up ADU may require Coastal Commission review, which can add time and complexity to the process.