Inspector, never, my guys walk it.

thanks for the info guys @Shawn Mcenteer can you tell me more about house hacking  and @William Halick i'll definitely be reaching out 

You can only play games for so long.Chances are your next door neighbor is an IRS agent and turns you in when your tenants blocks their drive or some other random event disturbing your IRS neighbor.ADU catches fire and your insurance won't cover you, because it was an illegal and unpermitted structure.The city inspector told the last guy not to build or rent it, and is now pissed and wants to make an example of you and just red tags the whole property and no one can occupy for the next 1-2-3 years while you wait for a hearing.Then when you get the hearing, "staff" recommends you tear the whole structure down, and if you still want an ADU, you can apply for a permit and rebuild it.Your tenant quits paying rent and won't move out and you can't evict them, because there is no valid lease and they're just your "roommate".Probably a dozen other bad things can happen to you when you do stuff like this. 

I hope everyone is well, I came here because I need expert advice from you guys, let me tell you my situation: I have a investment property that i purchased 2 years ago and is valued at 65k that does not have any mortgage and that is already paid off, I want to use that property to buy another one for down payment , the question here is: What is the best way to do it. a heloc or a cashout refinance and why. your response will be appreciated :)

My 2 cents is right there with the other guy, get into something on your own first to test the waters and know what it’s like to actually buy and do some work.

A guy named Ken on my job would eat lunch with me and tell me everything he knew.

Have you guys tried renting the home out immediately after closing escrow?

Maybe you could have a timber guy strategically come in and cut some of the timber down so you could get some cash and then sell to someone looking for some hunting land.  

The mortgage guy told me the other house would be treated as an ADU and give me no real value towards the value of my future mortgage.Not sure if that helps much?

What do you guys think I should do.