That said it can be tough to track down the right people, and the surplus may be due a lien, judgement, or mortgage holder.

All surplus goes to junior interests in priority of title.  

I recently read in the market analysis report that there was 4.4 month surplus, which is the highest it's been since Oct '12.

Hello, I am curious to hear from  fellow Iowa investors about the effects of newly constructed rental properties on existing properties and rents.  My first property is a Single Family house very near to downtown Ceda...

True positive cash flow is that generated by a property with a hypothetical 100% financing position.Cash investors feel they receive more cash monthly but receive the lowest possible ROI on that cash.If you have stopped expanding your investments and look to benefit greater from your cash flow then don't pay down the property simply because you have surplus cash.

The US has much more generous depreciation and capital gains tax deferral than Australia and losses will be generated early on that will shelter the surplus cash flow from the property that can be used to pay down debt, so it isn't a disaster.It is difficult for non resident aliens to borrow from US banks but not impossible if a) there is plenty of equity and b) there is strong cash flow and debt service.  

You'd likely have no worries, since the property will likely go for $400k anyway, if it's worth $600k, and the IRS will get paid from the surplus.  

The cabinets may be old, but the kitchen is so small that putting new ones in from a discount surplus store with laminate counters would be an inexpensive undertaking if the current tenant were to move on after the lease and they needed replacing.  

Build up the personal financial position first, with lots of monthly cash surplus from steady jobs and a strong financial base of assets accumulated over many years.

Unless you are buying at a huge discount that you expect to refi in 6 months and lose PMI you aren't going to get rid of it for a while so keep it in your calculation.Even if you get rid of PMI, let's say $300, your PITI will be 1850 (assuming the interest rate doesn't go up) which gives you a $900 surplus on the income side.