The risk is that, if this doesn't occur in time, the market itself will "sort out" the issues on its own and arrive at an equilibrium that is far from what most (or all) stakeholders would prefer.

If you house hack and stop having to pay for most or all of your own housing you will increase the amount you can save for the next place. 

That means if you can pay some or all of it back, pay interest only on the amount that is still withdrawn, and still have access to the entire line of credit until the withdrawal period expires, usually 10 years. 

I think we probably over improve in our market in CA, but we have been successful at the BRRRR and it is easy to force the equity, which we have to or all of our cash for the down would be stuck.

Is it based off of features (like having a fully functional kitchen and separate entrance), the share of utilities, intent, or all/none of the above?

You can use someone else's money, but that person will want interest, fees, equity, or all of the above. 

They may end up being a good team member, friend, and/or ally in the business!

I shipped down my 911 4 s.. those roads are so bad that i had to get cavities replaced and i just sold it while i was there. 

@Liz Ridgway your understanding is correct in that you must sell a material portion (or all) of the real estate activity in order to claim passive losses.

Personally, I wouldn't be overly excited about the numbers on this deal, $150 "positive" cash flow before expenses likely means that you'll be losing on this one over time once expenses are taken into the equation.For what it's worth, I would look at this type of transaction to see if I could fill the property with a long-term lease/option resident and possibly get a higher monthly payment (and offset much or all of the maintenance costs on the resident).