The dissent agreed with the majority that the sale must include a permanent dwelling and that a principal-residence sale must include a home and improvements, but argued that the dwelling could be demolished and rebuilt as the petitioners had done, where even though the original house was gone, this would be defined as renovation of the original principal residence, not as a different residence, and not interrupt the 5-year period.

Gradually improving the property by raising rents, improving curb appeal (trimming overgrown trees/ bushes, new landscaping, power washing).

It’s what you actually paid for it, along with any major improvements. 

When buying a property and the exit is to refinance over and over, what is the best balance to have when it comes to cashflow and using the NOI to improve the property to grab more money at the refinance ?

I should be able to help you identify what to look for, and how building an ADU really improves the numbers on a property.

I'm wondering what improvements would you guys consider the most important and which improvements increase the house value the most in percentage terms?

What is more important is what you can do with the property by making small improvements and increasing the rent.Below is an example of the potential profits for a 10-unit property.

So I ripped out the pad, installed new rebar properly, poured concrete and  built 2 more bedrooms/large family room/full bath and laundry room. 1209 SF area improvement

That's improves your overall cash flow by paying less for your own housing.

You partner with someone when they bring something to the table that will make your business improve exponentially.