As for valuation, I see no reasons why a Junior ADU would negatively impact additional housing unit.

Otherwise, you may need to replace a water service (13-15k), electrical service (10-15k) and upgrade wiring (This is a tough one, but maybe an additional 8-15k inside).

The only reason he did it was because it led to additional work.

Coffered ceilings, low corner additions etc.Anyone can slap lipstick on a pig, looking for high value add in high demand markets is where the $ is.

However I believe it’s great to have two independent sets of eyes (in addition to your own) on the books to make sure everything is accounted for and running smoothly.

Additionally, I know the Waivo product for STR covers intentional and accidental damages.

In addition to your down payment, plan for closing costs (around 2-5% of the purchase price) and set aside at least 3-6 months of expenses for repairs, maintenance, and vacancies.

No, you cannot create phantom losses this way.Some additional issues that we have not addressed:- holding rentals inside an S-corp has many tax disadvantages- you will likely jeopardize your $250k/$500k capital gain exclusion for homesteads- you will lose asset protection afforded to personal residences by most states- you will lose your homestead exemption for local property tax - your insurance will have to change from owner-occupied to rental, i.e. go up- and there's moreConclusion: there're reasons why nobody is doing this clever "strategy" but A+ for trying.

Additionally, the price point is still cheap enough to find the 1% rule and positive cash flow and there's amazing appreciation potential.

They countered and we met them in the middle at 15% under, and then negotiated an additional $15k off during inspection, so total discount was around $150k off list price/ what they paid in 2022.