It was suggested that we create an operational company that will lease rooms to individuals in recovery.

The plan was to pay cash, refi out and use that to improve the property. 

For example, if you buy a home for 100k, and then improve the property and now it is worth 200k. 

Some other other options to consider that may be easier, would be these: 1) Take your $840k and have a money manager at Vanguard, Fidelity or Schwab invest it in individual bonds at a 4-5% return. 

Some of the easiest deals my dad did were taking a large piece of land and subdividing it into smaller pieces and then selling them off individually.

If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.DSCR lenders generally let you vest either individually or as an LLC.

I’ve got her dealing with 8 properties which have individual accounts.

>  Some LP want cash>  Some want alternative real estate>  Some want individual properties currently within the partnership. 

I think finding other value adds than ADU additions are likely to be the superior investment versus adding a ADU.Best wishes, especially wishing the best to all the fire victims.I believe the market around north L.A. is one filled with some pretty well healed individuals.

Excited and looking forward to improving!