Home equity is the difference between what your house is worth and what you owe on your mortgage.

Also, I am guessing that due to the state of the house, it would not qualify for a conventional loan?

How did you add value to the deal?

That's when it clicked for me - that cap rates are more just a measure of risk.

@Martin StreichPlease go to your profile page https://www.biggerpockets.com/users/msresolutions and click on your photo to update it.

I would love to make a move before the end of the year and so I keep trying to decide which of the following is best for me:1) Buy 1 more expensive CA property near here, and thus a better tenant (less likely to cause issues), but lose a little bit of money every month due to the current numbers, while hoping for future appreciation? 

I want to learn as much as I can before diving into the investing world.

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If your clients/or yourself put the time into learning and figuring out a niche in the RE world that excites you, start looking for deals that make sense and always run the numbers.

Do you know the laws of the land?