So I assume national appreciation matches inflation and then use data from neighborhood scout on local appreciation to gauge what to drop in to my model.The implication of what you're saying is that I could use a lower CapEx reserve if I was going to sell in 5 years.

I will scout the market for my competition and find what they are charging and base my prices off of that.

I've been looking at sites like trulia and zillow, but are there any other sites you would recommend for initial scouting?

We have been scouting the area and looking at houses.

I've heard from other investors that there are companies specializing in bird dogging and scouting for properties.

Hey folks,I am on a road trip at the moment scouting properties.  

I hired a local kid as a bird dog to scout vacants, and he quit after one day because he was worried he might be perceived as an informant (and get killed).Violent crime remains high. 

I have lots of friends who live in Syracuse who act as my neighborhood scouts and I'm talking to a potential fix-and-flip team to tap into.  

Good information and will use that advice in my arsenal while scouting out properties.

Thanks to all- I've certainly scouted Livonia, Redford, and other lower priced metro Detroit markets.. and agree that ROI can be better achieved in these areas, given the right deal- no doubt.