I completely agree with @Ashish Acharya's points about the cost-effectiveness of a HELOC and the potential credit implications if it’s secured by your primary residence.

However, other factors will matter, and the rates of taxation are different for different components of this Step 3 result.

@Carl RowlesI recommend a HELOC or Heloan on your primary residence or the rental if you have enough equity in either.

And using the process buy a new property or properties that you also intend to hold for investment use.The issue for you might be that you purchased this property with the primary intent of selling. 

Money is...important, but it's also a way to make a positive difference in people's lives. 

While similar these 2 operate vastly differently, are positioned wildly differently. 

Even in HCOL areas, adding an ADU typically does not make sense because developing a single small unit is the most expensive residential development that exists.Adding an ADU is a lot of work (probably more than a brrrr but with worse return), has poor financing options, typically adds less value than the cost of the addition, and detracts something from the primary structure even if it is just yard and privacy.Good luck 

I have liquid assets and want to make smart, scalable investments that balance cash flow, appreciation, and low risk.GoalsGenerate consistent cash flow to diversify my income.Maximize appreciation potential for long-term wealth growth.Invest in areas with low crime rates to minimize risk.Reduce my tax burden for 2024 with real estate purchases.My Current ThoughtsI’m torn between two main strategies:Multifamily Properties:Looking at markets like Austin, Raleigh, and Tampa for 10-50 unit multifamily properties.Love the scalability and centralized management, but I'm concerned about high upfront costs and competition.Section 8 Housing:Considering affordable markets like Memphis, Cleveland, or Indianapolis to purchase 5-10 single-family homes.I like the government-backed rent stability, but managing multiple properties across different locations seems intensive.Key QuestionsWhich strategy would you recommend for my goals and liquidity?

out of state is more difficult than advertised. do you already own a primary residence? 

In US tax law, the depreciable lifespan of an asset is defined by its MACRS classification which stands for “Modified Accelerated Cost Recovery System.”Under MACRS, depreciable assets are assigned to different classes, with each class having a specific recovery period.