You have used home equity lines of credit to purchase investment rentals and want to know the best way to pay down the HELOCs.Between the two properties you bought, after expenses, you have $250 a month positive cashflow to use.What I like to do is pay down some principal every month with my positive cashflow.I use my extra active income from real estate commissions helping other investors to pay down the principal even more which just frees up that credit for me to use again.I know I can refinance the HELOC debt before it changes to principal and interest as it is just interest only payments as yours are.One difference is the cashflow, I have greater positive cashflow and could make the principal and interest payment in the future with the extra cashflow I already enjoy.I always get HELOCs on my income properties as well after purchasing them to pull out as much of my downpayment as possible.

I’m not looking for a step-by-step guide, but I know I’m not the only one in this position.

My advice would be to drown out the noise you hear from others with positivity and thorough due diligence.

@Ashley Kroft, what a great position to be in!

Quote from @Anthony Maffei: I purchased a two-family property in 2017 and now have around $500K in positive equity.

Has anyone been in a similar position, or has had success offering this type of agreement to a previous owner of a property who has not yet voluntarily vacated?

We pride ourselves in keeping the forums positive, helpful, and focused on real estate (please, no politics, religion, etc.).

The 1031 positions the investor into a property that the REIT absorbs as @Joe Sera said in the 721 conversion. 

That means there is not really an effect on the debt to income ratio neither positive (income) or negative (loss) but rather simply making that payment  non issue. 

Key Factors for a Good Seller-Financed DealCash Flow: Rental income should exceed monthly payments (PITI) by at least 1.25–1.5x.Purchase Price: Compare to ARV and market value for fair pricing and equity potential.Interest Rate: Aim for competitive rates; higher rates must still allow positive cash flow.Amortization/Balloon Terms: Favor longer amortization and align balloon payments with your exit strategy.Down Payment: Lower upfront costs reduce risk but should meet the seller's expectations.Flexibility: Seek no prepayment penalties and fair late-payment clauses.Property Condition: Ensure the property’s condition matches terms through inspections.Seller Motivation: Assess the seller’s willingness to negotiate favorable terms.Exit Strategy: Have a clear plan for refinancing or payoff at term end.Portfolio Fit: Ensure the deal aligns with your financial goals and risk tolerance.Vetting multiple deals and consulting professionals is crucial to making sound decisions.