@James Robertson KP is Key Principal.

Note, a recast isn't a principal paydown which doesn't involve a re-amortization. 

Originally posted by @Mike Dymski:Good locationsCash flowAdd valuePrudent debtReserves good principals.. some markets were inventory is scarce there is still hot demand.

I'm not an agent and know the principals personally and have invested.

and the Cash out is more what I'm leaning towards now looking at it with both option it would be around the same payment every month but the HELOC unless I payed extra on the principal I would never really be paying my balance down with Refinance I would be putting some towards the principal, with my local bank I can get 75% LTV and on a 7/1 ARM it would be around 3.625% interest Rate.

You can always make extra principal payments if you wanna pay it off sooner.

The podcast you were listening to, possibly they got the principal loan from the bank and maybe a seller carry back for the remainder of the portion?

Too late to undo that but it is a draw back financially that is only going to get worse.

Please understand, these are rules of thumbs and there are variables that may make some of this work better or worse, but this is a variation of the framework that I start pre-screening all of my deals and my clients deals with.I understand that you are looking at someone paying part of your overhead while the asset appreciates, but let's look at the numbers more deeply as they are today.The mortgage payment is figured on $172k (principal after 3.5% FHA down payment) for 360 months at 5% interestMortgage - $925/moTaxes - $125/moInsurance - $100/moPMI - $108/mo__________Monthly expenses = $1,258Cash Flow = -$558/mo (negative)This number does not include other, normal costs like maintenance, vacancy costs and loss of rents, capital upgrades and expenses, property management (future expense,) other admin costs (accountants, attorneys, legal costs, etc.,) or the hours of personal time you may have to invest in finding and screening tenants, scheduling maintenance and repairs, chasing late rents, etc. 

. $185/mo + $150/mo in principal pay down average over first 10 years = $335/mo on $0 investment.$4020/year at infinite COC Scenario 2: Keep all your 82k cash in the property.