Maybe your perception was different, but I remember the sense we had at Wacker Neuson going through rounds of layoffs, dealers defaulting, order cancelations and no sense when the construction equipment industry would recover, or if there would even be a full recovery - ever.. nobody had ever seen anything like it. 2008 was bad, I think Lehman Brothers collapsed in October, by 2009 we had to assume the equipment industry would never be the same.

That "higher cash flow: is nothing more than you recovering the cash you put in from the bank. 

Not if you don't want to wait forever to recover your cost. 

I did recovable because it is easy to move assets in and out of a recovable trust.

@Olga DaiselThe short answer is: you depreciate $200,000.The $100,000 plus the demo costs will be capitalized into land value. it cannot be depreciated, but you will eventually recover it when the new property is sold.The long answer would be too long.

It took my family years to financially recover.

Using this example, with an ARV of $250k you could refinance out 65% …get close to 160k out of the deal recovering most of your partners capital while still having 35% equity in the property and having positive cash flow. 

Even if I increase my rent, I figure it will probably take 4 to 5 years to recover the 8K as well as a couple of years to cover the lost rent.I will look into the lease option. 

I feel good about doing it if I can pull all my money out at refinance but that seems almost like a gamble.This leads me to thinking about a house hack again, although there's no way to recover those funds.

A big unexpected $30k issue (I've had several) will take decades to recover from.