At 7.5%, it doesn't sound like hard money financing but you also have a very low down payment there around 5%. 3.

The tenant has been a problem from the beginning, such as behind in rent for a year, buys a brand-new Jeep, lies about ex-husbands job, child support, court cases, etc...Now, the house needs a new deck, so I went up to inspect it.

There are very few high paying jobs in the area (IMO) so most of the high income earners are working remotely for other places. 

I became an agent years ago because I felt and still feel 6% is ridiculous unless it's clearly a problem property or a very low sales price.  

Low price high reward How did you find this deal and how did you negotiate it?

We decided to replace wooden windows in a 2300sf flip we were doing, instead of rebuild them on a 1908 house.   

If you have a 1st lien with a low rate and a sizeable balance outstanding on the property, this strategy may not make sense. 

This may be the best of both worlds scenario, some income and some recapture of equity.

Based on our current income levels I should be able to accomplish this goal in the next 10 years and I am 39 now.My question to the group is what to do with my 401K.

Hi Jayson, In some cases it can be a great decision.Take a look at the cost of capital the HELOC or refinance is going to give you compared to what you are looking at now.Also look at the income generated/write offs/appreciation that a rental property is going to give you.If it is going to yield you positive results, I say go for it!