In San Diego at the current rates for a purchase loan (which has better rates than an ADU additions) at high LTV, I show 1% does not cash flow on a sustained basis.  

They could self manage for several years, using the rental income, until the next phase of their retirement.If they have a decent amount of financial discipline, they may want to get a HELOC now before they build to get the most favorable rate.

Maintenance and potential repairs will also require a long-term financial plan and setting aside a contingency fund for such expenses.The steady cash flow, appreciation over time, and tax benefits can make a meaningful difference to your wealth in the long term, especially with the principal paydown on the mortgage.However, if managing the property from a distance feels too burdensome, or if you’d prefer the certainty and flexibility that comes with having less debt (especially given the high mortgage rates), selling and using the $100,000 in equity to reduce your loan for your next home may be the smarter move.

Are there any wholesale lenders that will do a rate and term refi on 4,800,000 loan balance,  5 unit property.

Congrats on your success so far.Some random thoughts for you:- It might be difficult to tap the equity in the rental at this time given the current state of interest rates. 

@Robin Simon I completed a refinance with my credit union at terms of 3/30/75 @6.85% I will have the renwal in 2026 and hoping rates come down a little by then.

I agree with William that the rate you have is probably better than you'd be able to get moving into another property with rates where they are today. 

Definitely something to clarify upfront...If you’re replacing with another restaurant, it should be an easier transition since the setup is already in place.Your biggest risk is vacancy $450K/year is solid, but if you ever need a new tenant,  ensuring the lease rate is sustainable is key! 

With a fideicomiso, the gross income is taxed through a withholding tax whereas, with the corporation, the rate, you can deduct expenses but the taxation rate is higher.

2) If you do owner-occupied cashout refi for best rate, you technically have to live in the home for 12 months before renting it out. * Some responders here may suggest not worrying about that and renting it out anyways.