With significant demographic shifts either anticipated or under way, new renter households are expected to increase by 13 million by 2030, according to the Urban Institute.Enjoying a passive income stream has never been more obvious than the increasing heating up housing rental market.

We ended up getting more than what we were anticipating before putting the house on the market, so we are happy with that. 

One of the things I've heard about hard money is in addition to higher rates, they have pre-payment penalties.Current or prior ownership of real estate: as stated, I am currently renting and intend to rent for at least another year or so.Value of property at present and/or your offer price: $158000 (zestimate)After repair value: $Anticipated or actual appraisal issues: will perform one during due diligence Current rents per month: $425Fair market rents per month: $500Down payment or equity: $30000Source of down payment funds, if applicable: see aboveIncome Source: Salaried/hourly W2, VA comp, Gross monthly income (optional): $1800 tax exempt, approx $4-5k in base wage (+ OT opportunities)Monthly debt obligations appearing on credit report, plus (if applicable) personal rent and alimony/child support/etc: $800/mo in rentFICO: Excellent Credit issues: None.

If your anticipated returns(measured by cash on cash and appreciation) are similar to what you expect in buying a local property, I say go for it- if you're off by a few percent, you've learned a valuable lesson.

I anticipate max water flow demand to be around 4 GPM, with low flow fixtures installed. 

As Andy points out above, you could end up holding the note for far longer than you anticipated and that interest will eat you alive. 

So, bottom line, if you hold back whatever your anticipated income tax rate will be, you should be more than fine.

I have enough for a down payment for a 500k house, but it will take some time for me to find a multi at that price range and anticipate paying interest rates closer to what a hard money loan seems to be (9-11%).

It all has to do with your time horizon, the deal you can find to deploy the cash into and your long term goals. if you anticipate using the cash flow to live on at some point or bearing retirement the lower loan amount and less doors probably serves you best.

A few considerations:Cost - I anticipate having relatively significant resources and want to live in highly desirable locations, but at the same time, I want to cut costs significantly from my lifestyle in the LA market.