When it comes to 2-4 units not all markets are created equal. the northeast and midwest tend to have a lot more market for these properties then do newer areas of the south and west. 

Same goes for number of LLCs and what to fund them with, since bear in mind that CA tends to be more cumbersome and expensive to have LLCs than other states.California is generally more cumbersome than other states when it comes to taxes and filings.

And its only got 2 bedrooms and 1300 sq ft whereas 3 bedrooms from 1300 to 1600 sq ft tends to be the sweet spot for families.I'd knock it down to 1650 to get down to where quite a few sfh's with 3 bedrooms are listed at out there and eat the 200/mo.   

Of course property taxes tend to be more expensive than interest payments where I live.The FED is supposed to keep employment low and inflation around 2%.

Section 8 tenants also tend to stay longer, which means less turnover and vacancy costs.

Just a short list its like 50 ways to leave your lover there are 50 gothcas in sub to. 1. the easiest for everyone to understand the sub to violated the Alienation clause in the mortgage or deed of trust and holder of the mortgage DT / Note decides to call the note due and payable and starts a foreclosure. 2. foreclosure started and the person who bought sub to has no means to pay it off or refinance it and the original sellers credit get trashed and if its a deficiency judgement state even on an owner occ like Texas lender sues original seller for the deficiency. 3. this kind of investing or acquiring assets tends to attract those with limited resources so they have no ability to fix things they decide to scale up and then it goes out of control and sellers are really harmed4. deal goes south and original seller sues or files complaint with AG. 5.

Investors tend to buy where the numbers work best and home buyers buy where they want to live.For buyers in Austin the markets on the edge of the metro are more affordable and growing very rapidly for instance.

The reality is, cold calling, direct mail, PPC/SEO, referrals, and strategic partnerships all have the potential to be effective.

I understand certain neighborhoods in America will be heavy to section 8 and its preferred as the market tenants tend to not pay .

:)I definitely hear you on the risk - I aim to buy-and-hold the properties and place Section 8 tenants, so the deals tend to be as safe as possible, but I understand your and Mitch's points about deals possibly losing money.Where I'm getting lost is on how to structure being paid when I borrow from private lenders.