Here We Go, Deal Time

[Curtis Shotliff]

The biggest hold up on my 10,000 MPH run at this deal was getting my wife on board. I made every mistake possible with her in this process. I tried to address her emotional fears with numbers. While I have extreme fears about providing income, her fears are on the risks of having additional liabilities. I forgot to answer why we should work our tails off for this. We live in an extremely rural area with an above average income for the town. Our current mortgage on our way to big house is $138,000. Monthly payment with insurance and taxes $1,002. We are looking at a duplex for $49,900. Average rent in the area for comparable units are between $600- $725. We will need $12,000 for a down payment. This will be funded by either a cashout refinance or a HELOC on our primary residence, its estimated value is $180,000. Our contractor and the bank's have signed off that everything is kosher. All repairs would be cosmetic, we asked for an additional $5,000. The loan on the duplex is where I get a little lost. The bank is offering a 15 year commercial real estate loan with a balloon at 5 years. Payments would be $332, which is doubled up by the HELOC payment. Should we attack the HELOC like I rode into Baghdad or is the a better option? Does the deal make sense to y'all?