BTW all the people casting doom and gloom for companies like Tesla, should get a life as the brilliant guys like Elan Musk, who have founded multiple successful companies just don’t fade away in oblivion and will keep on innovating and rebuilding the world.

Is it best to do a total gut or tear down and rebuild?

and then re-building the entire house under neath.Lesson number 2 - in hindsight we should have dozed the house and started fresh with a larger new house.However we learned alot about the process, construction, changing direction when things go wrong, being flexible and rolling with the punches.We ended up with a nice place that we paid almost 100% of the appraisal price for, but we only owe 40k and it cash flows well. 

One other effect of this negative equity situation is that you will have reduced your ability to borrow to rebuild the building due to the existing debt and your need to service that debt.

If I had to start all over again with poor credit, and no cash, I could rebuild faster than anyone using all cash and leaving it in the property.Basic numbers:All Cash                  Property #1             With Leverage$80,000                   ARV (6 mos)             $80,000$60,000                  Cost in cash              $60,000$    0                       REFI Loan                 $60,000 (75%)$60,000                 Cash still in deal         $     0$80,000                   Equity                       $20,000    $ 600/m                   CF/Month                 $  325/m *w/debt)$7200/yr                  CF/year                    $  3900/year($42,800)loss           Net cash 1yr            $3900 GainAll Cash               Property #2             With Leverage5 years ($8k/yr)   Time to next deal        6 months$80,000              ARV (6 mos)                 $80,000$60,000             Cost in NEW cash         $    0$60,000          TOTAL NEW cash in      $60,000$ 0 REFI            Loan                              $60,000 (75%)$60,000             Cash still in deal            $   0          .....6 months after 1st deal (still in yr #1)$60,000              "      "   (2 deals)           $   0   $80,000             Equity (2 deals)             $40,000$600/m              CF/Month                     $ 650/m *w/debt)$7,200/yr            CF/year                        $ 7,800/year($42,800)loss      Net cash 1yr                $5,850 Gain (6 mo 2nd deal)           .....8 years after 1st deal       2                   # of properties                          16$120,000            Total NEW Cash in deals       $60,000 $160,000            Equity                                     $320,000$1200/m             CF/Month                              $10,400/m *w/debt)$14,400/yr          CF/year                                  $124,800/year($45,200)loss      Net cash 8yr                          $ not enough room         ...I stop, you keep goingEvery new property means you have all cash in so you are negative until your cash flow recovers it.I stopped, refinanced my last house, and recovered the only cash I put in, so my total out of pocket cost was .....$0This is not compounding...this is just duplication.  

Today I own a property management company and we are getting ready to rebuild this website to enable more SEO options. 

.- where company moving forward it seems divided, some want move like before, but most 'software only' co or investment only company is working through 100% WFH model , it seems not having office or greatly reducing office opex is way to go, look at google co where they immediately stopped the project to rebuild campus in downtown san jose- it seems the majority is still willing to choose hybrid model, not just because of office opex is less but people seems enjoying more work-life-balance these days.- dont think there would be reversion to the norm.

., if a firm demolishes and rebuilds a structure to the extent that it is effectively new construction), then the activity is not a renovation for purposes of the RRP Rule and therefore not subject to any RRP requirements."

You have to rebuild a new identity without one of the most important persons in your life.It shows that while we are busy with day to day activities we have to value every year, month, week, day, minute, second we have with the people we care about.

Unless you are planning to rebuild every last part of that house already.