Some info: -The 'investment property' is worth ~$650K and is paid off.

I think build to rent is a great option if you can get cheap enough land to make it worth it.

Based on his claim of net-worth above 100M, it is strange that it has reached the lawsuit level.https://setexasrecord.com/stories/666762037-court-activity-o...

It’s great that you’ve already identified zip codes like 73128, 73170, and 73135; they all have unique advantages worth exploring.I agree with the earlier response—73170 and 73135 are solid picks.

Even if you have an absolutely solid home and its worth over 600k, in my area the most you can rent it for is $4000 MAX.

Is it worth it to go through the proper process with the city and run the risk of a huge expense to make this a 3rd unit? 

As you purchase more, your net worth will go up more quickly than the savings in interest with the other option.

Quote from @Victor Yang:In addition, is it possible for me and my wife to gift 36k worth of equity per year of the house (under the annual exclusion limit) and therefore have none of the costs go towards the lifetime gift limit?

@Amir PortalStarting the BRRRR strategy in the Dallas-Fort Worth (DFW) area is a smart way to build your real estate portfolio, especially with the area's growth and rental demand.

The property is only worth what it is worth - what the seller needs to make is irrelevant.