I just bought my first 4 plex two weeks ago using a HELOC from my primary residence as the down payment. I owe about $50k on this HELOC and have another $50k available to me.

My grandma happens to be very old and her health is failing and I recently talked with my parents about buying her house from them after she passes. They agreed and are willing to sell it at a HUGE discount to me when that time comes as they want to help me out but make some money in the process. We are talking 40%-50% off market value. Her house is valued around $300k and I would be able to purchase it anywhere from $150k - $180k. It is fully remodeled. Rented. And in perfect condition.

My plan was to put 20% ($30k from my HELOC) on the $150k purchase price, for example, and take a mortgage of $120k. This would give me a property that cash flows $500 per month at the current rent. This is a great deal. But then I thought that I want to pay off my HELOC and get my money back fast so after a seasoning period, if necessary, why not refinance to a $150k mortgage, get my $30k back so my own money is pulled out and then just use the cash flow from the 4 plex and the house to pay down the $50k still owed? Or would it be better to refinance into an even bigger mortgage ($180k) and take more money out to apply to the HELOC to pay it down as fast as possible? I use $180k because this mortgage would put my cash flow at $200 a month on that house.

What would you do in this situation if you were able to buy a remodeled and updated home at half price? I'm thinking it's best to buy it as low as I can, refi into the largest mortgage possible that still keeps my cash flow at $200 per door minimum and pay back my HELOC as fast as possible. Then be able to use this money for more deals. And then I may be able to get a HELOC on my grandmas house at 75% LTV and I would have access to another $45k from that. I appreciate the responses!

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