If you’re interested in investing in real estate, you can consider doing so with a Self-Directed IRA to defer taxes on capital gains until you actually withdraw the funds from your IRA.

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.

If you need financial help, ask under the "Finance, Tax, and Legal" forum.

Thats $7700 a year NOT including my accountant/Tax prep. 

Ensure you collect a proper security deposit (typically one month's rent in Florida) to cover potential damages.Your plan to increase rent next year makes sense given rising costs (taxes, insurance, and maintenance).

The property was rented and generated $160 cash flow after mortgage, taxes, insurance and property management fees were paid.

If you were able to increase the value of the property significantly after the rehab, then you could bring the deal to a community bank  to refinance and take the hard money lender out.You keep all the equity and don’t have to file a partnership return for your annual tax return, which can be costly.  

You'll also need to show stable income for the past two years through W-2s or tax returns.Talk to 3-5 lenders to compare their rates, fees, and terms.

However, before you do so you should ensure that your revenue from rental income covers ALL your property expenses in the townhome, including mortgage, taxes, insurance, maintenance/repairs, vacancy, property management, etc...

example:Purchase Price: $70kRehab: $30kARV: $200kRent: $1,500I can pull out up to $150k but with taxes and insurance I’d be in the red.