The owner was very motivated to sell the house as he was moving out of state for a better job opportunity and to be closer to family.

Seller was motivated and they ultimately worked with me through the issues with the lender.

The moral is: you have options, you can sell or refi/HELOC, to get the equity, and redeploy I many areas that are making a lot more than the 1.3% ROE you are currently achieving with your Austin rental.

It is a little more work with the Airbnb portion, but you will achieve great cash flow, probably $1000+ net cash flow per month over your mortgage.If you want good cash flow and less work than above, you can buy a 5+ bedroom/3+ bathroom single family house, live in the smallest room, and then rent out all the bedrooms.

I have an off-market property with a motivated seller, and I feel like I am stuck.

This will require the seller to be extremely motivated, and to place A LOT of trust in you.

. $400,000 total), someone could buy a 16-unit building for $5.46M and renovate to be all in for under $6M with finishing surfaces close to what you are proposing for your new construction.Now, if this allows them to achieve the same rents as what you are proposing, then you can clearly see the problem - their valuation, all things equal will be same as yours.

Those sellers will be more motivated to negociate. 

Looks like a lot of paperwork that doesn’t truly achieve anything.  

That book hands down changed my life, and it is one that I go back to reference quite often when I start to feel like I need to focus or if I'm feeling lost as to what the "next best step" is for me to achieve my BIG WHY.