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.

The units are all currently occupied right now, so we won't have to worry about the buyer's market right now haha.With the cash flow I will receive, it will be enough to take care of property taxes, insurance, and enough to save up for any emergiences with the unit that I will need to take care of, so no need to worry, I got you :)!

Anyone answering is not responding as a Tax accountant, Insurance expert or as a Financial advisor.  

Tax-Free Exchanges: While 1031 exchanges aren't available to SDIRAs, the tax deferral within the account means you can sell property and reinvest proceeds into new opportunities without immediate tax consequences.

Hey @Nick Gallon Martin, I recommend speaking to a Tax Planner/CPA, @Jeff Nash would be a great resource for you.

Whether you need a CPA with just three rentals depends on the complexity of your situation and your comfort level with DIY tax prep.If things are pretty straightforward, you might be fine with tax software for now.

Somebody bought that house at Tax Sale.   

You’ll pay more for tax prep, more for record keeping, more for financing but what will you get?

I set up tax lien as a keyword alert so I get alerted when someone mentions them.

I don't know the answers on taxes, but New Jersey is the densest state in America.