But like Dan mention on his duplex my ROE is dropping like a rock as the equity increases. 

How is it that we can be turned down for a $250,000 HELOC when we own our home (no mortgage) which is worth $550,000, a duplex we bought last year with $80,000 equity that's  worth $240,000 and a business that has been rock steady for almost 20 years?

I then rehabbed an old farmhouse using a contractor to put a basement under it and I then plumbed it completely, replaced wiring, sheet rock, windows and roof.

Just trying to point out there is in fact two sides of the story, and that it is usually the lack of money in the deal (nature of the numbers) that truly causes the problems.

Also, I am guessing the home was not connected for natural gas and that is why you decided to go with propane heat.

Everything is going to hinge on the nature of the part being rented and how your accountant has set it up.  

Higher down payment, naturally. 

Some areas a just naturally more expensive.

Natural gas prices have dropped , we are exporting gas now .

I’m learning real estate investing, and naturally understanding finances is going to be something I need to master.