W/o knowing the details of your deal, dealing with dcra and spending well over 6 figures to add a bedroom hardly seems worth it, if you made a mistake you may have to eat a loss, but don’t compound your issues, I only stick to projects that don’t invoke architectural permits in dc but I’ve heard it can easily run 9 month even more if your in an historic district just to get permits.

I am remote and he lives in Phoenix.It is a 3br, 2ba in Historical district in Phoenix. 

Some neighborhoods do have specific historic preservation rules (I'm thinking specifically of the neighborhoods to the north of the Homewood Campus), but I can't advise on that without knowing your location.Good luck!

One of the acquaintances I have told me that he once came up with a down deposit on a house by securing using a cash advance on a 0% credit card (12 month promo), I thought that was genius and also historical!

Historically, rents will pop and catch up with the market. 

This could include a condo conversion of a historical building and a separate lot that could also be developed.

Higher interest rates may slow the rapid appreciation some, but even if they notch up a point or two, we are still in historic low territory for rates.

These are usually higher rates than a typical conventional loan but might be a good solution to your situation. 2) You might currently see historical low interest rates but lenders tighten up on their lending qualifications during difficult times like this (pandemic, recession, economic hardship, etc).

@Scott KohlerIf it's maintaining a 100% occupancy, and has done so historically, then I don't think I'd change the system unless you think you can increase cash flow somehow by doing so. 

@Alan Mills if it is a “historical” building, then sometimes the replacement cost can be high if the materials originally used were considered coveted for the time.