At some point you crack or get forced into a bad living situation and can no longer stomach paying rent.

But in the meantime, do we sink our cash in now and barely break even waiting for that to happen... or do we bail and let someone else with a stronger stomach take the plunge?

Once your overflowing with knowledge of your farm area it makes it easier to stomach the initial leap.  

My HELOC rate cap is around 14%, so it could conceivably more than double at some point over the next few years if the Fed gets even more aggressive... point being, definitely be familiar with your HELOC terms, and plan for the absolute worst with rates--given the inflation, the Fed will be raising rates for the foreseeable future, and it could get a lot worse before it gets better....If you have the stomach for it, more house hacking could provide the best returns, since you get to take advantage of owner-occupant mortgages...All the news from the front lines indicates that buyer demand has slowed SIGNIFICANTLY since the most recent rate hikes, and presumably we'll start seeing the effects of that on prices in the near future (in my area, it already seems like we're seeing more than normal price reductions) ...so, your calculations may look quite different in a couple months.

When that contract comes up for renewal, either replace them or give them a bunch of news they will have trouble trying to stomach.

I can speak specifically on the financing, it's different on every deal and what both the LP's and GP's can stomach.

If you really can't stomach a slightly negative cashflow for the first couple of years (until you gradually raise rents), then you should focus on investing somewhere outside of NYC (maybe NJ, CT, or slightly upstate like Albany). 3.

My phone rang yesterday and I saw his name come up on the caller ID and I just had that pit in my stomach feeling.

It's not uncommon for them to ask for 100% of first month's rent. 25% of lease renewal is tough to stomach but not unusual.

That is how I've been helping my buyers stomach these rates and buying them time to hopefully refinance if and when rates go back down.