You'll want to incorporate interest costs on the HELOC while you're using it, but that will add to your holding costs in addition to utilities, closing costs, etc..

The big issue is building a single small residential unit is the most expensive residential development.Here is a list of why adding a single ADU in single family zoned areas in my CA market is typically a poor RE investment:1) The value added by the ADU addition is often significantly less than the cost of adding the ADU.

The first applicant will eventually get tired of his free-loading friends and problems will ensue.

If you turn any two "bonus rooms" (rec room, office, formal dining room) into two more bedrooms, then you're at $5,950+ per month—a 138% increase in rental income.Now, imagine scaling this across multiple properties while keeping lower upfront costs compared to multifamily properties.

For the high cost areas like Palo Alto it is difficult to get a property to cashflow out the gate because rents have not caught up with the cost. 

But I understand where I’m at now, and am willing to work for free until I can provide such value.A little about me.

For a single property, a strong umbrella insurance policy may offer sufficient protection at a lower cost.

Feel free to reach out if you want to chat further!

@Kelly Taylor who doesn’t like tax free atm withdrawals?  

This practice also frees up more money for lenders to use to fund additional mortgages.In "non-conforming loan" world, anything goes.