Calculating ROI on a first investment property using a HEL

[Mike Colucci]

Hi all. I need some help. I have a condo that is payed off and I want to take out a home equity loan to use as a down payment on my first investment property. The property appraiser's website says my condo's "Just/Market Value" is $93,860. Let's assume this is the number used to calculate my HEL; 80% of that is $75,000. So now I will have two separate loans to pay back, with possibly two different sets of terms. How would I calculate the ROI on a potential investment property of let's say $300,000 using the Bigger Pockets calculator or the four box method? I ask because there could be two different interest rates on both the loans. And then would I refinance to consolidate both those loans into one loan after the seasoning period?