Insight into financing

[Sharlene Burch]

Insight on financing these two deals appreciated. I have an opportunity to purchase 2 rentals from the same individual. One is a single family home renting for $850 and the other an up/down duplex combined rent of $1700. All three tenants are long term renters and on month to month agreements. Purchase price on both combined would be around $180,000 may be able to negotiate that lower once the inspections come in. I ran the numbers thru the Bigger Pockets Calculator and COC return is around 9% on both and I'm comfortable with that. I have been pre-approved for a conventional loan with 20% down. However not sure what the best option is for the down payment. I'm over 60 so I could pull it out of my 401K with no penalty, but I would get hit with taxes on it and I'm already in a pretty high tax bracket. I also have a HELOC I could access for the down payment, but then I feel I'd be over leveraged on the properties. I have very good credit and work full time with a pretty decent salary so I'm not retiring for probably 5-10 more years. I also continue to put about $10,000 a year into my 401K. I'm leaning towards accessing part of my 401K and part HELOC, maybe a 50/50 split. Just looking for advice from more experienced investors to see if there is another option or if I'm missing something in this scenario that might make it an even better deal.

Just to add another layer on to this, I am working with a realtor on this and she mentioned that this guy possibly has a 3rd rental he’d like to sell. I did ask her if he’d be willing to sell all three and she stated he is waiting to sell the 3rd right now (she thought perhaps because of taxes he's already sold 2 others this year) With interest rates being so low right now if it also cash flows and can get me 9% COC I'd like to make him an offer on that one too. How would you entice him to sell?