Unlike a mortgage the interest on your loan will not be tax deductible.

Every month, property 2 has been paying most of the mortgage on that Property 1 home equity loan.

A $60K down payment will get you a $300K property (assuming your income is high enough and debt low enough to qualify for a $240K mortgage).

Refinancing will change your mortgage rate, and if it’s worse than your current rate, it’s not worth it unless you’re getting a great deal.

I’m thinking with a 2.25% rate, that’s a good mortgage to hang on to if it performs well as a rental.

You have to adjust your expectations to match current reality, which includes higher mortgage rates, higher prices, more expensive taxes and insurance, more competition, etc.

Home equity is the difference between how much your house is worth and how much you still owe on your mortgage.

Lesson: I wish I'd have gotten more of these properties in the good ol' days of 3% mortgages!

Conventional mortgage with 20% down How did you add value to the deal?

But if they wanted less control in investments---go the route of equities, fixed income like tbills or CDs, mortgage notes syndicators, REITs, possibly RE syndicators but do your diligence especially now, and even crypto cause that's an investment with little control.