When you mentioned pulling out $110k, that’s the perfect snapshot of how equity can turn into future deals without selling outright.So, if you were to rinse and repeat, would you still go for another rental thta’s already turnkey, or would you look for something you could add value to?

The key to success lies in ensuring you're entering the market at the right value.

This is an additional step that would not be present for developing a lot where you are adding value.  

You could also get a line of credit for about $150k (you should be able to borrow 75% of the value.)The reason I suggest this is…1) you save $40-$60k in selling costs. 2) you have a lower blended interest rate (2/3rds at 3.25% and 1/3rd at 7 or 8% instead of the whole $500k at 7 or 8%) saving you another $1k/mo in interest. 3) you only pay interest on that $150k when you actually use it, not from day 1  Unless you hate this property, or want to buy something you can’t afford without selling, that would be my plan.

Conventional How did you add value to the deal?

If the structure on the property is determined to have no value, be careful when you consider paying the “value of the land”.The value of raw land is different than the value of land with an existing structure, even if the structure has no value.  

Look where to add value. 

Sometimes new investors can be eager to hit a certain rental amount, pricing a property above market value.

Really cheap to aquire and almost doubles in value after he uses the bobcat to level it out....

The 1031 exchange rule to defer your tax is two part 1) reinvest all your proceeds and 2) purchase a property (or properties / DSTs/TICs) with an equal or greater market value.