If you're still looking for a CPA/Tax Strategist in California feel free connect.

Feel free to PM me. 

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..

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.

From there we identify properties that could have some potential and if you are interesting in diving deeper, 1) we do a thorough video walkthrough to give you a realistic look of the property, 2) we give a ballpark estimate of rehab costs (we do 40 a year with our GCs o we will get pretty close), 3) we talk through market rent with our property management team, ARV, and potential highest and best use.Ideally you find great investor agents who know their market really well and have a network of resources to provide you with enough confidence to take reasonable action. 

Also, you didnt mention any financing costs, was this built with cash or do you roll that into your cost of construction?

Best way is to consult with a tax advisor to ensure compliance with IRS guidelines.

Feel free to reach out with any questions. 

If you’re just getting started in real estate, feel free to reach out – I’ve been coaching new investors for a while and am happy to help you however I can.

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.