Ideally you should already know the demand and price you will sell this property for.

I love being a private lender but the fact that it simply increases my taxable income makes me consider shifting some of my note portfolio to multi-family perhaps...You might find this discussion beneficial where similar question is raised: https://www.biggerpockets.com/forums/51/topics/604...Owning notes in your retirement account (especially self-directed Roth IRA or Roth Solo 401k) is ideal since you can have tax-free income for the rest of your life if you utilize one of these vehicles. 

Ideally I'd like to refinance it after the cottage is completed and rented.

Ideally, I would like to manage properties that don't reside in the Bay Area and hope to manage properties out of state where it's more affordable to cover a down payment.

I'd like to learn the ropes and perhaps start off small and offer specialty services of research and "connecting the dots" to ideally partner on JV deals.

Good luck, and remember there are plenty of deals.

@Doug Woodward  As others have mentioned, ideally it should be secured by a second position lien, and it's a pretty straight forward process to have an attorney execute that. 

I don’t remember what all the initial numbers were anymore, but I’m pretty sure it cashflowed about $24 after refinancing, and after accounting for the 50% rule.

As you compare, remember a trade rolls ALL of your equity forward, a refinance puts SOME of your equity in cash.

@Joe Splitrock I can't remember if I've said this before, but my plan is to take 10% off the top of rents, like a Property Manager would.