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.This example shows that while the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall annual loss.

There are some scenarios which can change the equation and take priority over the opportunity cost equation demonstrated above.  

It's going to cost about $550k to build and it has already appraised well over $800k.

Obviously aside from minor material cost savings the biggest reason is to save labor on all of the cutting in, which I feel would likely be moot with 3 sheens.

New builds are far more desirable, and have less total cost of ownership than many of the stick framed, pre-existing, non conforming older homes. 

Quick Turnaround: Whole-tailing allows for rapid transactions, minimizing holding costs.

Be sure to no only account for the cost of the cash for keys but your additional holding costs while you have to wait to get them out.

@Andrew GarrettI’ve been investing in NC for a while, the main issue with Raleigh is rents are low compared to costs of homes.

I also suggest that the tenant install a camera that stores videos of the driveway, then when tenant has proof, you can send notice to owner next door that he is to eliminate hazards he is creating, or you will sue for damages, especially if it costs you tenants, as they can’t afford and shouldn’t have to deal with repeated damage.

Was the owner doing his own repairs and hiding the costs?