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.While the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall loss.

There are a lot of rules to follow, but make sure you have a great custodian. 

Everyone has been spoiled by the last 10+ years of low property values with high rents and low interest rates.- Just ask any investor doing deals prior to 2008 Real Estate Crash!

They will basically be break even though after refinancing at 75-80% LTV with the higher interest rates.

"District South was financed with a fixed interest rate construction loan from our partners at First Financial Bank NA.

Ultimately, putting more down will allow you to get a interest rate and lower mortgage payment over time. 

How will the partnership cash flow cover the HELOC payments if interest rates increase?

and any other advise would be great. 

Great post.

When you draw from the equity, you are "borrowing" it from the bank and have to pay interest.If you borrow against the equity at 7% interest and then loan it out at 15% interest, you are earning a positive 8%.