Additional Info —Key Details:Location: Outside Santa Fe, NMProperty Size: 20 acres (valued at $80,000)Project: Two new STR unitsExisting Experience: Family has two fully-occupied LTRs nearby, generating $2,000/monthConstruction Approach: Self-contracted with licensed trades for electrical/plumbingCost Assumption: $80,000 per unit, plus ~20% for inflation (based on 5–8-year-old build costs)Financing: Using land equity as down payment on construction loan (expecting closing costs to be major expense)Request: Looking for feedback, potential pitfalls, and general guidance

Both properties have a substantial amount of equity that’s essentially sitting idle.Would it be a good idea to tap into this equity (through a HELOC, cash-out refinance, etc.) to fund future fix-and-flip projects or purchase additional rental properties?

Additionally if you're running an active business in the IRA the income will have to pay UBIT.   

Additionally, do you all generally use a smaller income criteria if the rent is inclusive of utilities? 

But there are many things that can be done to greatly reduce the chance.For example, many sponsors are audited which provides an additional set of eyes.

Her husband is also a GC who can help build additional units as needed if you get something that can fit an ADU.

Additionally, the frequent zoom meetings help provide new opportunities to learn with the group, network, and get specific answers for your questions. 

Quote from @Conte Cuttino: Makes sense @Andrew Freed so say if we I can make it additional legal space, do you think the 107K left in the property for the return is worth it or should I sale and move on? 

Additionally, the price point is still cheap enough to find the 1% rule and positive cash flow and there's amazing appreciation potential.

Additionally, I'm hearing at meetups that this could extend to multi-fam under 4 units as well, although I haven't been able to confirm.I work exclusively with smaller investors in the multi family space and would be happy to chat more about it.