This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.This example shows that while the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall annual loss.

Additionally, as Gino said, when you are raising capital from passive investors who are relying on you to generate their profits, you are selling securities and must follow securities laws; i.e., you need to learn how to "syndicate" real estate.

Finding quality tenants is crucial for generating consistent rental income.

The issue becomes if I leave, the proerty doesn’t generate positive cashflow.

I called a random locksmith and I was quated 200 + taxes.

For rentals, focus on properties that generate solid cash flow after covering mortgage, taxes, insurance, and maintenance.

You now have a higher-value property that is ready to rent.Rent: Once the rehab is complete, rent out the property to generate monthly cash flow.

This leaves me to consider mid terms rentals as a way to generate above average cash flow while having a reasonable amount of management. 

I'm sure with your responses, I will generate more questions.Thank you for all the help!

For instance, a beachfront condo with a spectacular, beach view from the living room and balcony, priced around $600K, only generates a gross income of about $50K.