Lets assume (for illustration purposes) your annual gross rent is $1000.

I would think investors would want that to be a lot more consistent, and an efficient market for fixer uppers would reflect that.Regarding the gray lines of intersection, not sure if they are just poorly illustrated or unrealistic.

@Jordan Archer I'm somewhat happy you asked this question because I think it helps illustrate how subjective cap rates are. 

I can illustrate this for you.

@Russell Brazil @Andrew Syrios great illustrations.

Combining your pay down on your loan and appreciation of $150,000 you need to ask yourself would you buy that same duplex with $200,000 down (adding 50k for pay down for illustration).

@Mary MitchellWhat a fantastic explanation, I was in between terms here and you illustrated it for me very clearly.

@RonS5 Ron, would you please post a simple example to illustrate your 87.5% recovery calculation (i.e., to determine whether you would bid as a junior lien holder in a senior sale)? 

Everyone looks at the graphs and models over the last so many decades and comes to a conclusion of what we saw ..well that might not illustrate how bad things can actually get .

Never say never, right, but really, you'll probably win the lotto first.Let's use some numbers to illustrate how this could work.