You have to exclude the gain only if the rented space was separate dwelling unit ( duplex).

Feel" the true beat of the portfolio's income and expenses performance before using leverage to speed up the growth of your portfolio.Using cash only will protect your bottom line in scenario's like yours when the properties don't perform as expected as you won't be on the hook to cover the mortgage expenses.Just my bias opinion so take it with a grain of salt.I've also witnessed many finger pointing instances when others get involved.Like a new property manager, realtor, contractor, etc...I've had my share of bad experiences with realtors that threw my company under the bus and got in the investors ear to flog it at any price just so they can make a quick commission.It get's very messy, painful and pretty much turns into a disaster with the investor not knowing who to trust or what to do anymore.Similar to what you post about has happened to me and my company many times and if allowed the opportunity, we do our best to fix and come good.Some loose trust and faith and I 100% understand, but as soon as someone leaves the wing of my company there is not much that we can do because as I mentioned above, everyone else get's involved, has an opinion and the situation get's very messy.Having in-house property management is vital when such a "crisis" arises.I tried out-sourced PM when we first started and it was a disaster.We had no choice other than to bring it in-house.Hated my life for the first 5 years with in-house PM and fast forward 10 years, it has become our "golden goose" and a very well streamlined and beautiful business.From what I've seen and read on the forum and elsewhere it seems like RTR has a good reputation and what you have mentioned seems like a "worst case scenario".I hope RTR will assist you the best they can and all I can say is learn from the experience and don't give up.Do your best to weather the storm and focus on minutia.Don't have regrets and don't spend too much time dwelling on the past.Glimpse into the past to get guidance from what you could have done better and think ahead.Move forward smarter, more experienced and better.Wishing you well and much success with your future endeavors.

I recently changed dwelling policies to State Farm and they include “Roof Surf Loss Settlement - ACV” in the forms, options, and endorsements section.

I would suggest getting someone very familiar with the area and not think its a good deal just because its a brand new build. this is why I suggest Build to rent buyers around the country look at least at multiple unit dwellings. the majority of investors are buying single family homes where the rents don't even meet the 1% rule. we build infill triplexes in columbus that meet these ratios and are well locate in the urban core. you have to find an operator that does what you want. sorry to hear about your issues Chris 

We will renovate the fix up the first floor additional dwelling and plan to rent it out as a STR for the rest of 1st year to maximize the return of our renovation expense against our W2 taxes via the Cost Seg / Bonus Depreciation.

Not only covering the rental income in cases where the dwelling is uninhabitable but more so if the tenant defaults and stops paying rent and has to be evicted.

I'm interested in purchasing a single-family home (SFH) with an accessory dwelling unit (ADU) in concord, CA of approximately $800K-$900k.

Hey Becca,Have you looked into Additional Dwelling Units out there? 

If you just compare the main coverage amounts such as dwelling, liability, deductible, etc. you could be missing HUGE differences in the policy that are written in insurance lingo.Foremost is a good company. 

An ADU is an Accessory Dwelling Unit -- specifically, a garage or other structure converted into a living space like a studio apartment.Houses can have one ADU and small multifamily property can have two ADUs (and more under certain circumstances).Here's an example deal, one I was exploring with a client recently:https://www.redfin.com/CA/Los-Angeles/624-N-Evergreen-Ave-90...This fourplex has two large garages, each of which can be converted into a studio apartment collecting $1600/month in rent (with plenty of off-street parking still available for tenants).