I know they have a cap at 10.We have also looked at using local banks in the area but those terms are usually 3 years arms to ten year arms and 20 year loans so it lowers cash flow significantly. 

This negative position can consume years of cash flow to recover.

If you have not already purchased this policy, I would look for a policy that provided a stated amount deductible for wind/hail vs. a % deductible.

And as you say it's an UNKNOWN amount, because it's a %. 

So to answer the question specifically no I would not buy a property that did not cash flow and only for tax basis.

Sara,I see this a lot and I always ask if you know you are going to refinance in the long run to consolidate the Heloc why not just do a Cash out refinance instead. 

Purchase price: $72,000 Cash invested: $107,600Case Study: Cockroaches to Cash FlowProperty AcquisitionI found this property through MLS.

I'm making a healthy downpayment cash by doing a cash out refinance on three of my established properties that I know can cover the debt service handily.

Seller wants $160,000 cash out which leaves $50,000 in equity for the buyer.I had a taker from CA but he couldn't come up with the cash.I was not aware of anyone that understands that kind of deal.  

Rents have been pretty close to what the housing authorities advertise, sometimes even a bit higher.Fort Wayne’s a solid spot with low taxes and good cash flow—definitely worth looking into.