I question how much value above costs can be achieved.An ideal BRRRR has zero costs and has positive cash flow after the refi to extract the value add.  

You want to have a statement balance at zero or as low as you can get it. 

Each has its strengths—align the strategy with your financial goals, timeline, and risk tolerance for the best results!

@Michelle SharkoAnswering questions in step by step fashion:- Is it a good thing to do or not is a personal finance decision and it depends on the person asking it, their risk tolerance which in part has to do with how this HELOC or line of credit works and how your personality fares relative to taking on new debt (a person more adverse to debt might have sufficient savings and temperament to pay down/back the debt versus a financially liberal person might get in over their skii's as).

Contrast this with someone that has adequate umbrella policy.  

My drone showed that the structure looked pretty good, but with zero access not sure of its value. 

U can have zero experience and just need a few bucks and a  good credit score and you can buy a home to live in or a rental.. but not development deals.. different ball game

@Lucas SchlundI agree with @Ty Coutts that it depends on your risk tolerance and financial stability. 

I ran into this recent TurboTax article  that led me to believe it was possible: Second, you may have a net operating loss (NOL) if the Section 1231 loss is large enough to reduce your other income below zero.

The point is you have to have a policy that holds true across all tenants and all situations.