How should I pay for the house next door?

[Anthony Arredondo]

I own a house on a commercial block and I’ve got a license to use it as a boarding house.  What that means is I’ve got bunks inside and a property manager onsite who collects weekly rent from people who are in between places or just happen to like the lifestyle (everyone is friends and parties together, so a lot of people are attracted to it.)  It’s not a bad business model if you can put up with the year long buildout and licensure process; the house pulls about $3k a month instead of $1k.  

Anyway, the guy next door wants to sell me his gutted house.  Awesome, I can buy it, renovate, and double the number of bunks without having to hire someone new, then pull $70k a year out of two SFHs.  

My question: He wants $60k. I've got $30k cash, $10k stocks, could get a HELOC for $70k, and have some friends in cash businesses who could lend me maybe $10 or $20k more.

What is the best way to pay for this? Buy with HELOC money and pay my own cash for renovations? Borrow $10k from a friend and try to pay $50k cash for it?

What do you guys think?