He is securing expensive debt, not debt through a bank, isn't putting any capital into the deal and structuring the equity investment in a highly risky manner without any upside offered to the investor.

The premise proclaimed at the start of this thread is simply not supported by mathematics with the exception of the specific case where the interest rate on the HELoC/secure LoC is sufficiently lower than the rate being paid on the mortgage.

For example, the most important job of a property manager is securing reliable tenants—those who stay for many years, always pay rent on time, and take good care of the property.

The lender lent based on them being one thing which secures the debt.

If you're living in it now, you'll probably be required to have a signed lease in place as well as proof that first month's rent/security deposit were collected in order to get a DSCR loan (they're business purpose loans and don't allow owner occupancy).

It's not like we're bundling sub2 deals into tranches and selling them as mortgage-backed securities like they were with subprime mortgages, yet. 

Here is my current situation - I can probably secure a personal loan for about 200k at around a 3-4% interest rate with a 5-year tenor.

The vast majority of lawsuits against Landlords are for wrongful eviction, security deposit disputes, and Fair Housing Violations.

I guess my problem with being too up front about seeing their place is that I don't feel like I'm in a position of power right now to decline people since it's hard enough to find people that I want to even get to that point in the application process in the first place, but I have to snap out of that mindset and have to instead come from a place where I make them believe that I have a lot of other applicants and that it's my standard policy and it's something they'll have to go through if they want my place.....ESPECIALLY if I decide to only take 1st & security from them rather than 1st/last/security.Thanks again!

Nothing is truly "passive" and a big misconception with new folks wanting to enter the real estate arena.For example, just bought a 6 unit using leverage and trying to secure a loan was a disaster of a process.I can only imagine what others have to go through on every time they purchase a property using leverage.But then again, I'm bias to the "cash only" approach.The constantly changing conditions, terms, keeping tight bookkeeping records and tax returns in order and regularly manipulating the BS credit score algorithm.Placing good tenants is more a skill then hope.It took me 10+ years to fully wrap my head around using leverage the right way and being able to "manipulate" the system to get better rates with a quicker turn around.Keep being great thanks for your reading and replying to my comments 🙏