Appreciation potential certainly may be there but are you ok with neutral or negative cash flow?

Factors like zoning regulations, property size, and potential impact on your primary residence need to be considered.The ADU process can take time.

Also I have the potential to buy the neighbors lot of another acre guessing I could get it for $300-400k.

But you can still treat it as resulting in Ordinary Income even though it is reported on Schedule E, which lets you properly report in accordance with the tax results it seems you are shooting for under the tax return loophole.If your CPA is looking at switching it between schedules to get that tax result...it sounds like they don't understand the reporting position fully and/or they just don't know how to use their own software to address it.In summary, based on what you are describing for the situation, it should go on Schedule E, with what sounds like the resulting refund of $17k.

Risk:Retirement communities often enforce age restrictions, thereby limiting the potential tenant pool. 

STR saturation is market specific so you could look for a market that has STR potential and do RA there.

I know people pay over the appraisal in competitive markets but my situation is not ordinary.

Bottom line… I’d be willing to come in a few thousand dollars more on my offer if it means there’s future potential to earn that much extra in rent each month, and I’m not sure what to do.

If anyone knows of any multifamily deals available in the Dallas area or has insights into potential investment opportunities, I would love to hear from you.

It’s designed to save time and refine your search, making it easier to spot potential deals.If you’re interested, I’d be happy to share more about it and even offer you access to explore its features without any commitment.