You would end up saving the higher interest rate on the HELOC as well as closing costs.

Shoot me a DM if you want some help with finding a condo or house with a low rate that's on market.

Taxes will still be owed on the boot plus depreciation recapture (approximately $105K taxed at a 25% rate).

Quote from @John Warren: @Mordechai Chaimovitz cap rates and NOI are commercial real estate terms, and 1-4 units are not really valued in the same way.

However if it is a larger property I comp it like I do a commercial property with a cap rate and with cash flow.

Keep in mind a HELOC rate will be much higher because of the CLTV and risk.

Quote from @Scott Mac: It might be the investing environment.Right now we have a different interest rate picture then we had a few years ago.

Those are spray and pray techniques that don't fit with sellers right now because sellers/owners are sitting on a very low rate and don't want to move to go up 4-5 points on their rate.Listings aren't a start now thing as well.

What interest rate are you getting?

I don't do this for a living and have no real world experience, but at 40% down, even with a 7% int rate, that seems like a high monthly payment.