I think this is a calculation a lot of homeowners are making right now--especially if they have a low interest mortgage, equity, and their house will cashflow as a rental.The choice is a personal one of course, but I think your future self will thank you if you pull out some equity from your existing home with a HELOC for the downpayment on the next house and a cushion renting your current home, use a property manager as you have other things to do, and buy the next house and do the same thing again.

Interest/mortgage rates are at historical highs, crashing new home construction and existing home sales to the lowest level in 30 years.

Doesn't mean that markers don't exist.

I'm not sure if they still have that in this current rate environment but they do exist. 

Instead of buying existing properties and rehabbing them, the idea is to partner with a builder who constructs new rental properties, then refinance and rent them out. 

Why does PM start promoting the property only after existing tenant moved out and property fixed (small repairs)?

Don't want to pay tax on selling the rentals I unfortunately don't think they actually want to utilize the 121 to sell their existing primary and then potentially buy another one-it sounds like the goal is to ultimately continue owing that initial home which I think makes this whole plan 5x more likely to be torn apart under audit because they're trying to end up with the same property they started with.  

Find someone you know, like, and trust, then partner with them on a deal.This doesn't have to be an existing investor.

Since you decided to change the contract by asking for a concession (which invalidates the existing contract), you will not be able to sue for specific performance. 

It is usually difficult to take money against it from the bank, it might not be a 1:1 value add - meaning if you invest 100k into an adu it might not raise your value by 100kThat being said, it can be pretty lucrative especially in expensive and sunny CA - since building lots are no where to be found and existing real estate returns are very poor.My partner builds these units.