Account ClosedI recommend that have a consultation with your tax accountant and/or financial advisor on ways to reduce your taxes. 

This would obviously reduce my cash flow on both properties, as I would be paying the minimum HELOC payment plus extra towards the principal to pay it off quickly.

If we do cost segregation how much would we reduce our taxes by?

That can be used to buy down the mortgage rate or reduce closing costs. 

That would be a helpful addition to your plan as you would further reduce your cost of living.Also don’t forget from that $600 you are planning on getting in cash flow you have taxes, insurance, maintenance, capex, and vacancy to consider.With two homes, you may want to keep that extra $20k as an emergency fund rather than spending it on a third property and then be left with no emergency funds.

If the market rents do not cover the mortgage, you may do a no ratio DSCR for a higher rate/reduced LTV  Which most likely the 1007 will be nowhere near the revenue generated by a PadSplit operation.

You start with a purchase and sale agreement and reduce everything to writing.

Using a 1031 to upgrade to a two-family could help you reduce or eliminate the $1,000 out-of-pocket expense you’re paying now.Also, condos often come with HOA fees that limit cash flow, so be mindful of their impact.

@Will Almand A cost segregation (cost seg) study can accelerate depreciation on your properties, reducing taxable income by reclassifying components (e.g., appliances, HVAC) into shorter-lived categories.

Also with plans to reduce industrial "intensity" in and around residential areas.