This means no per booking fees for our owners, which adds up to a bundle of cash over the course of a year.  

We sold for $1,218,000 cash (15 offers, 5 days on the market, and got a cash buyer that was going to live there and make it their own home for their family).

I have a rental property that I paid cash for about 8 months ago.

Purchase price: $252,000 Cash invested: $25,000 Brick house, 4 bedroom, 2.5 Bath How did you find this deal and how did you negotiate it?

The difference is that he will not be making any payments on that cash during the build. 

It almost look like you a little or negative cash flow and look at tax benefit to justify keeping it. 

Option 1:30 Year FixedLoan Amount $202,500.00LTV 75%Discount Points %0.00Prepayment Penalty (3/2/1)Interest Rate % 8.225Origination Fee % 0.00Underwriting Fee $1,645.00Monthly Mortgage Payments $2,018.76Broker Fee % 1.25Cash From Borrower $78,081.01Option 2:5/6 ARMLoan Amount $202,500.00LTV 75%Discount Points %0.00Prepayment Penalty (3/2/1)Interest Rate % 8.025Origination Fee % 0.00Underwriting Fee $1,645.00Monthly Mortgage Payments $1,990.40Broker Fee % 1.25Cash From Borrower $78,052.65I'm not sure what credit score is being used to qualify BUT this looks to be inline with the current market rates for a 75% LTV cash out on an invest property.

No problem going the extra mile. 

Based on the numbers you provided, your cost of capital is higher than your best case cash yield (cap rate).

Then your financing costs, to see if you have cash flow at end of the day (if you plan to hold).