In this case even if the project went south and you broke even or even lost money, the equity (debt) you used would still be covered by the income you are earning on the rental property. 

Let’s break this down because there’s a lot to unpack here.The real question is, how well is that debt working for you?

Hello Kyle,When screening applications for the properties that I manage, I always look for:- Income of at least 3 times the monthly rent (verified through the employer)- Credit score of 580+- Rental verification with past landlords (no outstanding balances, no late payments, and the property left in acceptable condition)- No history of collections, evictions, or criminal offenses- No overdue debt (except medical debt)I have found this screening standard very helpful when finding tenants who pay on time and treat the property well!

Is there debt on the property or are you doing all cash?

If you have a lot of equity and little cash flow, you should consider accessing that equity to use elsewhere.Another factor to consider is your interest rate on the debt.

There is life stages to investing, and the math is clear that strategic debt use, strategic leverage, pyramiding, appreciation, is the wealth generator. 

We already paid them a pretty sizeable entry fee ($30k) to cover some of their equity and debt in another project.

I haven’t gotten bids yet (build is too far away), but I’m hoping to keep it under $300K by subbing out the work myself.I’m not a huge Dave Ramsey fan, but I do lean toward being conservative and avoiding too much debt.

How much weight do you give to the cash flow benefit of cheap debt when the property is priced above market?

How much weight do you give to the cash flow benefit of cheap debt when the property is priced above market?