Strategy starting out while having assets / cash

[Robert Blake]

I'd like to move into REI and expect to continue working full time for at least some number of years to help finance expansion and such. We've got a small amount of cash to invest, a paid off 300k house primary residence as asset, and just over 6 figure retirement accounts that will likely get rolled to SDIRA.

I went to a local REIA meeting last night and they were talking about HML. From reading here over the past few days, that seems like a good vehicle for investing from an SDIRA. They were also talking about leveraging assets and making money in the middle. It occurred to me if this was a reasonable business model we could mortgage the house, lend out the proceeds and make what, 7-12% on that? I couldn't tell exactly what guesstimate numbers to use here. Would it really be equivalent to a mortgage to purchase a house? I.E., mid 3% interest, keep 20% down (I.E., retain as equity) to avoid PMI? Or would that be some totally different scenario? Some guesstimates on a spreadsheet (...which is probably wrong!) indicate that'd cash flow $25-30k a year. Of course that assumes full lending of all the money over a full year. Does that seem reasonable?

Or would it be better to borrow against the house to fund rental acquisitions? I’m not sure how that financing works. After 30K, we’d need to cash out somehow for more downpayments...but wouldn’t that count as borrowing a downpayment, which I thought you couldn’t do? In my stumbling around it also looked like rentals in the Denver Colorado area seemed a bit expensive given the 50% rule, but there’s always the possibility I’m not looking in the right places and doing the math wrong.

Sorry to be so clueless, but, any ideas?