Alternatives include using a 1031 exchange to buy a new rental property or completing the exchange first and then doing a cash-out refinance to fund the ADU.

. - Minimum work history: 1 year (please provide references and pay stubs for the past 3 months; if self-employed we can discuss alternatives to paystubs)

Quote from @Catherine Ding: My PM company is offering to do it for a high fee of $100/month so I'm trying to find alternative options.

@Ashish Acharya thank you for the helpful tax alternatives! 

Why not use bank debt or alternative lender debt if you don't qualify yet for bank originated debt?

My local area has high property tax and makes me wonder about PA as an alternative. 

We'll likely have to look for alternatives to our primary house since we won't be moving much anymore, but I like the idea of small multis and getting a lending who fully understands the VA is certainly good insight.Thanks,Fritz 

If a HELOC isn’t an option, alternatives like a home equity loan, business line of credit, or a DSCR loan could work depending on your situation.

Another alternative would be to buy the property yourself, keep the mortgage in your name but have your daughter on the title.

Alternatively, should I focus on making minor upgrades to the rental property to increase the rent and continue holding it, considering the neighborhood’s growth potential?