Advice On Best Option To Finance Purchase In My Situation
Hello all, so a good friend of mine came to me and is retiring. He has a commercial property that is appraised for $525k and he would like to sell it to me and I got him down to $460k and just rent it back from me for $4000/mo. He wants the cash for some other investments and I've known him 40 years. Anyways I wanted to put $200,000 down and finance the last $260,000 from the bank. The question I have is this. I have 5 other rental homes all paid off, worth about $350k and a couple parcels of land paid off that are worth about $300k total. The 5 rental homes are grossing about $4000/mo as well. I also have a nice vacation home thats got $222k left on the mortgage, worth about $625k and its renting for $3500/mo and cash flowing $1000/mo after all bills are paid and i put the extra $1k/mo towards principal.
Im thinking of possibly paying off the $625k rental at $222k and then that condo would net me $2500/mo after bills. I know not ideal for a property of that magnitude but its in a super in demand place on the beach and nobody really lives there full time and there's no economy so there's not really any renters, but i have one, a long term one who isn't leaving until I want to move there.
Is it smarter to pay off that property for $222k and finance the full $460k for this new property and use the new found cash flow to pay the note or would it be better to just put the $200k towards the new property and then just get another note? Or can I borrow against the properties I have? Whats the best plan of action. Thank you.