If I buy a house for $400k, and the market drops and the house is now worth $300k, I am under water.

The property is worth $8000 only.

@Kyle Kline“Investing for equity and not cash flow” doesn’t mean “buy properties that don’t cash flow.”To me, invest for equity not cash flow means that the PRIMARY reason to invest is for equity growth and an increase in net worth and NOT cash flow.I’ve been investing for over 40 years and while cash flow is important, it’s not why invest.A property must be self supporting ie produce enough cash flow to cover debt service, operational expenses including repairs and replacements.

I have sold over $200 million dollars worth of these types of properties in the Cleveland / Akron market and guess what?

With my increased AirBnB performance, I decided to turn 2 other rental homes into short term rentals and decided it was worth investing in proper training to make sure I was doing it right. 

You both have to decide whether this is worth the fight.

What is the home worth today?

As you know bedrooms are worth more to appraisers than an extra living room.

If you're not set on a specific market, it's worth waiting until you choose, as forming the LLC in your target state can simplify compliance, property registration, and taxes. 

Not worth it.