If the market softens for 6 months or a year, you just hold through it and get paid to do so. 

A $500000 house (in Riverside county) where rents cap at $2600 and PITI is $3200.The hope is to find location that appreciates and risk is softened by long term gains.

If its a well and you have a chlorination/softening system, that could change things slightly where you may want to get the water tested but that is extreme case. 

Our market is strong, STRs are solid, and prices are softening. 

@Victoria Lebedeva the Buffalo market is softening up a bit for the fist time in 2 years.

@Heather De lapDo you have a water softener?

If they stop paying and you have a recorded mortgage in 2nd position then you could foreclose on them subject to the first which cost will depend on state as well as time it will take.If it’s the original loan that goes defaulted then you open yourself up because it was sold to you sub2 and your agreement is with that seller that you are not honoring.Honestly I don’t know why people do sub2 as it has so many ways it can go wrong - especially if prices start to soften.

Multiple families in one home is absolutely a response to this and may soften the change. 

I have 2 rentals and a pretty big flip under my belt.I'd be much more inclined to BRRSRR and hold than flip, especially into a softening market.  

The softened market we are experiencing right now is a great time to step up to the plate and try to use a nice low down payment owner occupant loan on a multi unit, that you could move out of in about a year and then reap the cash flow afterwards holding as a rental property.