Right now, the best offers around me are for some 1.3-4 million, that only generated around 100k per year gross, so there would be a high chance of not cash flowing, and paying money, especially with a commercial loan (these buildings have more than 4 units).I was thinking that although the rental itself does not generate money, I would be able to deduct the mortgage interest, and depreciation from my personal w2 income and would be net positive.

I do generally agree that once someone has their person, they are not going to be very open to switching. but if you can prove yourself with someone building that team, you may find yourself in a great position. 

It has had higher appreciation than nearby towns since the pandemic and you should be cash flow neutral or slightly positive day one as a long-term rental with a 20% downpayment.Note that zillow and other websites greatly understate your property taxes. 

So eventually this negative cash flow property becomes cash flow positive and pays for itself including property taxes, hoa, mortgage etc.Trying to calculate how bad is my investment here or should i sell out if there is appreciation 

There are guidelines and guardrails, but a challenging deal can have positives and a golden deal can have issues below the surface.

There are markets today, even with high rates, that are cash flow positive and do have great appreciation. 

Now I had to be very strategic.

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

You have used home equity lines of credit to purchase investment rentals and want to know the best way to pay down the HELOCs.Between the two properties you bought, after expenses, you have $250 a month positive cashflow to use.What I like to do is pay down some principal every month with my positive cashflow.I use my extra active income from real estate commissions helping other investors to pay down the principal even more which just frees up that credit for me to use again.I know I can refinance the HELOC debt before it changes to principal and interest as it is just interest only payments as yours are.One difference is the cashflow, I have greater positive cashflow and could make the principal and interest payment in the future with the extra cashflow I already enjoy.I always get HELOCs on my income properties as well after purchasing them to pull out as much of my downpayment as possible.

They get a higher return since they are covering housing cost, have the $250k per spouse primary residence deduction in gains, is a savings account, higher leverage position, lower interest rate possible, will pay more premium for location, etc.House might be overpriced for REITs but not for home owners.