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.

Do you prefer your tenant shut down his business and stop paying you rent because they have no income?

This is one of those questions where paying a few bucks for professional advice might save you thousands later. 

Who pays for repairs?

Money down the road from a historically steady 10% increase in stocks that you will pay taxes on to collect, or immediate cash flow with tax advantages and an annual appreciation of 3-5%.Feel free to dm me if you would like to chat more on the subject 

I'm just gonna take the specs to local engineer or architect pay whatever consultation fee and have them review it.

Prices might definitely correct themselves over time across the country, but I don't see any projections of them going down 30-40% anytime soon and all the projections I've seen, prices are going up.But with rents being so high, and prices still relatively low, compared to a lot of other markets in the country, my experience in this market doesn't lead me at all to believe the bottom will fall out anytime soon.If you've been in Northeast Ohio over the last 5 years you can see for yourself how much they've built up the downtown and University Circle area and literally have poured billions of dollars into it's medical infrastructure, which is one of the best in the world, creating thousands of high paying jobs and people willing to pay high rental prices.But I do agree with Nathan that it's all about having the right team and property management to be successful in this market. 

Paying down your mortgage is 100% risk free. 

This will be my primary residence and my partner will be paying some portion towards the monthly expenses.

Quote from @Lucas Hunt:  I will essentially be managing the entire property/collecting rent and my friend will not have to lift a finger.No offense,  but your friend would be better off buying the property for himself and paying a PM 10%.