I would like to pull out equity from the homes to build either a house on each or an ADU (they are zoned multi-family) depending what makes the most sense on returns and what is feasible.

Depends on what your goals are. 1-4 units are still residential, so it doesn't really matter how you start.

but that's dependent on your job, relationship, goals, commute... we can't advise you on that.

It depends on the property because each has its own risks.

Depends on what you're trying to accomplish. 

So depending on if you are using it personally and want to have it pay for itself or you just want cash flow will help determine where you should look and what type/size home you want to consider.Please reach out anytime and let me know if I can be of help.

The refinance step is where you pull out this equity, typically in the form of a cash-out refinance.Here’s how it works:You refinance the property at its new appraised value (after rehab and renting).You take out a new loan based on that increased value, ideally for the full amount or more than what you originally paid for the property.The goal is to pull out enough money to cover the cost of the original purchase and rehab (or even more, depending on the property’s appreciation).This allows you to recover your initial investment, which can then be used to buy your next property.5.

If I do move in the next few years because of the military, I will decide if I want to sell for the appreciation depending on the market. 

Depending on the value at the time of death and your basis you may need to file a gift tax return.I would speak with a CA attorney to determine the best type of deed to file and a tax professional to gather more information.

Quote from @William Christiansen: Quote from @Charlie Hardage: @Carlos SilvaYa, it definitely works depending on your cash flow and numbers.