Be sure to calculate the impact this might have on your ROI.Fees: Be prepared for additional fees, such as origination fees, appraisal fees, and possible prepayment penalties.Things to Consider:Loan Terms: Understand the interest rate, the loan term, and any repayment penalties.

I would talk to your servicer to see if they can assist you. 

Additionally, it's easy for a house on one lease to get absolutely trashed by the renter.

Should I just save that additional tuition money and put that towards my first investment? 

Additionally, if your goal is to maximize personal financial benefits, consider profit distributions from the property-owning LLC, which may provide tax flexibility depending on your situation.By adhering to FMV, maintaining proper documentation, and structuring the lease agreement carefully, you can optimize tax benefits while staying compliant.This post does not create a CPA-Client relationship.

Here's an article with additional FAQs on cost segregation studies that you may find helpful.

I recently completed one on a multifamily property and found it to be a cost-effective approach.That said, there are a couple of additional factors to consider beyond the code differences between a garage conversion and new construction:Coastal Overlay Zones – If your property is in a coastal overlay, building a ground-up ADU may require Coastal Commission review, which can add time and complexity to the process.

If it were us, we would keep the property and take out loans against it for investing in additional industrial property. 

If you own a 2-flat with an additional non-conforming garden unit (basement) being rented, and you're considering a cash-out refinance, how will the lender evaluate the rental income?

- Highly recommend REQUIRING tenants to get Renters Insurance and adding you, as the landlord, as additionally insured.