In the end they ended up adjusting the return up +$1000.  

The table below lists inflation-adjusted purchasing power for the first ten years.After ten years, $1,000 will only be able to buy 61% (100% - 39%) of what it can buy today.

We had to bring on an energy audit firm to test and certify the work before and after construction.Beyond the planning, permitting, and historic reviews, the rest of the project runs as any major renovation projects.

There’s always gonna be hiccups, time delays, over budgets for unforeseen things that’s part of the business. execute, adjust, pivot learn and keep going! 

In other words, the adjusted rental income (75% of the gross rents) must be sufficient to cover the total mortgage payment of the property.Example of the FHA Self-Sufficiency Test Calculation:Gross Rental Income: Assume the appraiser estimates the total gross rental income from all units is $4,000 per month.Adjust Rental Income for Vacancy: Multiply the gross rental income by 75% to account for vacancies and maintenance costs.$4,000 x 0.75 = $3,000Monthly Mortgage Payment: Assume the total monthly mortgage payment (PITI + MIP) is $2,800.Result:Since the adjusted rental income ($3,000) is greater than the monthly mortgage payment ($2,800), the property passes the FHA self-sufficiency test.Importance of the Test:The self-sufficiency test is crucial for borrowers looking to finance a 3- or 4-unit property with an FHA loan.

Any tips on how to document the damage effectively or how to approach the adjuster?

Think about how can you make your property a no brainer when having to decide between an apartment and a home. 2-Contact homeowners who are not in your close proximity, so they do not feel threatened, and ask them what are they seeing in the market, and how are they are adjusting (most likely you are not the only one who is experiencing this). 3-  If you decide to work with a real estate agent, use one that works with rentals, and better yet, someone who specializes in property management as well, because they will help you weed out  bad applicants. 4- This last one I do not have experience with, but I would definitely try it if my rental was near a hospital: Partner with a company that finds housing for traveling nurses.

Is the HELOC adjustable or fixed. 

They did, 4 days later in person, and told us that we were in violation; that short term rentals (less than 7 days) were not an allowable use for our zoning designation, CRO (commercial, residential, office) and that we would be receiving a certified letter to cease and desist.

When I am sending the notice to my rental and I know they are not there I send it certified, signature required, no not forward, and the post office returns it back to me for no one signing it and the webpage gives a day to day accounting of the letter's travels.