@Jordyn Ohs Assuming your heloc is re-advanceable and the rate is higher than your mortgage, I would suggest you pay your HELOC down as quickly as possible with any cash flow from the properties.

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

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

Do you think this strategy gains strength if lets say... in five years interest rates are at 5.5 vs 7.5 now?  

They are asking for 28% capital call proportional to investment amount. primary purpose of capital call to survive high interest rates for next 1 year and hoping interest rates gets favorable by then.

El-ErianSun, January 10, 2021)) Mostly, I see a hint that it could result in rising interest rates.

Usually its because there is a lot of debt risk. when interest rates went up a year or so ago I lost over 300k in sydication projects I was a part of because I didn't understand this concept.

Well if you ran realistic conservative numbers for maintenance, capex, vacancy rates, rental income, etc then you don't really need cash flow do you?

The bank will make you leave 25% equity in the property - but you also still want the property to at least cash flow some - so be careful how much equity you pull out / new debt you take on.I would do a cost benefit analysis of what your actual gain is in cash-flow on buying a new property with a (currently) higher interest rate (if financing), versus just holding on to the current appreciated property and enjoying that cash flow.All the best!

Credit score and loan size can also affect what rate you may find.