Investment Property Question / Input

[Rodo Montes]

Hi everyone. I’m new to the bigger pockets website and fairly new to bigger pockets in general. I’ve only started listening/ reading investment podcast and books for about 2 months but the knowledge I’ve gained has been monumental. I discovered bigger pockets about a month ago and have been obsessed, and am spending about 3-4 hours a day listening to the podcast. I’ve listened to every single BP money podcast  already and am looking forward to starting their other podcast. 

So a brief summary on my background to help better facilitate answering my question. I'm 27 and have been investing for the last 3 years. I currently have 3 single family homes. 2 are completely paid off and bringing in $1200 in monthly gross income. The third is my personal home which I took out a HELOC to purchase one of the rental properties. I currently have $8000 left to pay off and then I'll be completely debt free.

My question is I currently have the opportunity to purchase a house from my brother in law for $119,000. We got it appraised and it appraised at $150,000 so he's giving us a great deal since we are family. I am planning to use part of my HELOC to put down the 20% and I got a conventional mortgage approval for 6.125% fixed rate. My HELOC rate is 5.25 prime plus .25 margin. The property is currently being rented to friends of ours for $850 and they aren't planning on staying there if we choose to keep them. With those kind of numbers does the investment make sense? Since this will be out first investment that we don't pay cash I'm a little new to this process and would love some feedback and advice. Let me know if I can provide more information. Thank you in advance for all your help!