Or are you using an SBLOC to bring $500k and then bringing another $200k in cash out of pocket? 

What out of state areas have you considered?

To me at my current knowledge level, this deal only works if taking over the loan - to limit the out of pocket money to acquire the property since the outside reno and new septic would take up the bulk of rehab costs. 

Should I use 401K to payoff mortgage and have that $2,000 as income OR take 4% of that 401K (only 8K) as income and keep the mortgage? 

I operate out of Nevada so have known of Anderson for many years.

I’m a fan of harvesting the equity to buy more and more cash flowing properties with zero out of pocket cash for down payments.

My concern is that you seem to be out of country.

@Mattin Hosh first, most cities in Metro Detroit have some type of rental property inspection every 2-3 years.It's not really a big deal 99% of the time - especially for owners who are NOT slumlords:)Also, a quick Google search will show that several states/cities are passing/considering similar legislation.One of the biggest mistakes we see newer investors making is NOT properly understanding Neighborhood/Property/Tenant Classes and naively assuming that any rental they buy will deliver Class A results.Read our copy & paste thoughts below and DM us if you'd like to dicuss more about the Detroit market:)-------------------------------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

When we built up the triplex, we set it up so that each of the 11 rooms can be rented out individually (all BR, except 2, have their own bathroom behind an electronically locked door).

Painting, plastering, refitting out fixtures and fittings, windows and doors.