If you're buying in a C or D class neighborhood, homes for under $150k, your situation is clearly different and your calculus should be as well, but be mindful that good advice "in general" or for another investor, may or may not be good advice for you.

And with a PROPER cap-x calculus you will know if something goes out early, in-line with expected life span, or out last expected life span.

Interesting way to do the numbers, by holding cash reserves and just removing it from the calculus of Cashflow, ConC, Cap rate etc.And good point on the Cap rate, that is obviously a clear metric along with ConC to compare apples to apples on a property.When you  both say vacancy varies, I agree, but when you are evaluating a property to decide if you want to buy it, are you using the vacancy rate from your property manager, the Turnkey provider, or some general knowledge you have from elsewhere (experience)?

If you're using calculus on the acquisition side, you're doing it wrong.

Right now the opposite is the case, though (at least in most cities).My calculus is a bit too involved to explain here, but a simplified version is this: historically the stock market goes up 10% a year (before inflation), so all my real estate deals need to make at least that CoC between appreciation, principle paydown, rent, etc. with similar levels of risk.

I think that changes the calculus significantly and the comments on here seem to be assuming this will be a pure rental.

So be nature a private lender is going to be a lower risk position than any LP position, all else being equal.How you assess those risks, and the fact that "all else" isn't actually equal does change this calculus, but from a technical stand point lenders (1st or 2nd lien position) hold less risk than equity investors.Now, I will agree that being a private lender is like buying single family rentals.  

But that's just the beginning of the calculus not the end.  

It’s worth paying someone to do the calculus toon as opposed to just spit-balling it.

I still use calculus, geometry, static beam analysis, flow rates, electrical circuitry loads etc etc.