In addition, the Grantor will probably be required to sign the same seller's affidavit that are needed for a non DIL closing. 

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?

Furthermore, whole note investments benefit from an additional 0.5% annualized yield and are entitled to a share of any extension fees charged to the borrower."  

If you can add a legal ADU at $25k in the Austin area then you should add it.  

1) Renting garage units2) Additional Pet Fees3) Adding flooring insulation in the upper unit led to improved efficiency and sound reduction for lower tenants.

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

If the price was right on Turn-key maybe, but probably more of the fixer-upper that can be leveraged later on for additional property or sold for a nice profit. 

I've got about $525K in equity in the property, but lenders have told me that I cannot get a HELOC to access that equity for additional purchases because the duplex was financed as an investment - they have said TX law dictates that HELOC can only be used on primary residences.

Ok it might not be 1:1 but it will add additional revenue.

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.