On the flip side if we keep it until the loan matures (8 years) we’ll have a nice nest egg to fall back on assuming the housing market stays in good shape, and it’ll likely continue to appreciate but our cash flow as a percentage of the equity won’t be great.

There are plenty of people that do a couple flips, eat the taxes, so that they can build up their saving for a larger down payment later.

I'll leave that to you and your tax professional...Valid point, which basically means: by taking a deduction now, you eat into your 199A 20% deduction.

So what will happen to the global economy if the U.S catches a flesh eating bacteria?

However the Phase I is about $2500 - I suppose I should eat the cost for peace of mind now instead of scrimping now and regretting it later.

It allows you to diversify into a portfolio of homes as opposed to putting all of your proverbial eggs in one basket.Be cautious tho as over the years I have witnessed countless investors buying properties in crappy areas, for more than they are worth and being passed on to crappy property management that nickel and dimes them to death (I guess all of those 15% "awesome" paper cap rates and promises of financial freedom aren't that awesome after all...)This is not just true for real estate deals but life in general (Your "piece of paper" degree does't necessarily dictate success in your chosen profession or your business)Real life experience is different to what any "piece of paper" says.In all reality guys it takes time to build financial freedom, and the more you can diversify your risk across multiple properties in your portfolio the less risk you bear in the long run.I may not be the smartest Aussie you have ever met, however I do understand a few basic rules that I follow on every acquisition I make.Strength in numbers, cash only, patience, and discipline.Let's talk about Strength first.Price point plays a big part of "strength in numbers" as it is safer to acquire 5 homes for a total of $350,000 as opposed to one for $350,000.What happens if "that one" property goes untenanted for 5 months?

If they balk, they don't get the job because I'm not going to eat their tax bill and I'm not playing patty-cake with the IRS.Keep smilin'Dennis

They started getting popular in the late 70s and early 80s, I believe, and there has been an incredible bull market since that time, so people who entered the workforce at that time and contributed diligently all these years (and just left it alone) are finding they have a nice nest egg, as long as their home is paid off and children are on their own by now. 

Eating at a restaurant does not mean you lost and the owner won.Buying a shirt, the same.

Cash-on-cash is your only metric here that may matter, and it's simply for comparing properties side-by-side and asking what the best use of your limited dollars is...Anyway,Your closing costs will be closer to 2% of the purchase price: $5,800 (unless the seller is covering this...if so, good job)Repair cost of $1,000 won't do anything...contractor fees will eat 50% of that...if you are renovating, you need to renovate to drive rents...$4k per unit will maybe do paint and carpet...a few fixtures.