In San Diego at the current rates for a purchase loan (which has better rates than an ADU additions) at high LTV, I show 1% does not cash flow on a sustained basis.  

Account ClosedAdding your property manager as "additional insured" is standard practice and beneficial for you.

The intention is for the development to be self-sustaining, environmentally conscious, innovative, and energy efficient.

The intention is for the development to be self-sustaining, environmentally conscious, innovative, and energy efficient.

There isn't a sustainability problem in Texas, it's a regulation problem.

However what happens when the tenant vacates and now the unit has to be turned over/takes a few months to find a new tenant and during that same period of time the sewer line goes and you get hit with that $15,000 cap ex expense in addition to the vacancy and turn over costs.

My goal is to leverage that equity for additional income.

Additionally, I would like to attempt to do the process Owner/Builder with subcontracting work out as well as doing some of the work I'm comfortable with (I have some experience with bathroom & kitchen remodeling an am not new to the construction industry).

Additionally, while rates aren't historically bad right now, they are higher than 4-5 years ago, and they will be even higher for you as an investor than they were as an owner occupant, which is what you were when you bought originally.I get that you are anxious to add to your portfolio, but that could be achieved without touching your first golden goose.Sometimes on BP, the push is to leverage every last spare penny, but that can be a risky game as the markets shift. 

Section 8 would tend to carry higher repair and as a result, additional vacancy.OP’s definition of cash flow is rent minus piti.