Unfortunately we are switching a LOT of policies from a dear friend (broker of 25 yrs) because of these issues.Local investors have also found that many Ins Co's review your Credit as well, inflating the premiums accordingly.In fact we had one investor couple (BK 7 yrs ago) get hit by NYCM with a $2400 premium for a duplex.???

With all the mistakes I've made before discovering BP -- thanks largely to the under-education and inflated promises I've received from gurus -- BP has enabled me to get REAL advice from REAL successful people in the business of real estate.

Dont let the guy over inflate it and take you to the cleaners.

Cons:Illiquid, especially when you need it.I'm sure other factors like the pros/cons of depreciation, pros/cons of inflation, etc. play a big role, but I'm not thinking that deep… yet.

Because of a combination of factors, including what is called Proposal A and Headlee, a city without undeveloped land is guaranteed to have their revenues fall behind inflation more and more each year.

Worst case scenario is that the tenant hires their friend in the the granite install business, enters into an inflated $7,000 contract to install granite, the installer installs cheap scrap pieces of granite, the tenant does not pay and the installer puts a $7,000 mechanics lien on your house, and you have no recourse against tenants since they do not have normal jobs and are deadbeats.

That will show what your return % on your money is based on your initial down payment.For example in your original 55K 550/mo example your COC would be about 3%, which pretty well means you're keeping up with inflation.

Some markets are overheated with the cap rates for multifamily for sure.There is talk down the road of people with buying these low caps having a multifamily bubble pop.I can see institutions buying brand new class A stuff to outpace inflation but not everyday investors.I wouldn't feel comfortable buying at that low of a spread.Glad you sold it.

If your talking over one or two years you would need pretty strong price inflation if you are the buy, hold and rent type.

I would also verify that those rents reflect market rates for the area and aren't inflated.