Purchase price: $90,000 Cash invested: $15,000 What made you interested in investing in this type of deal?

I want to change that this year. 

I battle with this a lot!

You could also get a line of credit for about $150k (you should be able to borrow 75% of the value.)The reason I suggest this is…1) you save $40-$60k in selling costs. 2) you have a lower blended interest rate (2/3rds at 3.25% and 1/3rd at 7 or 8% instead of the whole $500k at 7 or 8%) saving you another $1k/mo in interest. 3) you only pay interest on that $150k when you actually use it, not from day 1  Unless you hate this property, or want to buy something you can’t afford without selling, that would be my plan.

.: I already knew something like this was going to eventually happen.

I’ve seen situations like this before..one old friend of mine in Austin had a few industrial buildings where the cash flow was decent but not dazzling, and he was itching for a way to ramp things up.

If you have extra cash at the end of the month, then do double up payments on the mortgages so the principle is reduced and this will increase your heloc room.

He will be selling the project to buyers once completed and not interested in operating.How should I evaluate this deal from an investment point?

@Sean OToole    this is an interesting post Sean.  

Very interesting closing!