I will be investing $1,000 just to earn my MLO license, and another $1,000+ for my real estate license to what equates to a sales person job.Pitching and qualifying clients with all the new and ever changing lending laws, only getting paid when I close a transaction which can be months apart from paycheck to paycheck.Right now I'm unemployed and I see myself homeless, destitute, and unhappy playing the W-2 game.

My personal financial situation never was/is a part of the equation, except for showing enough cash for down payment, fees and 6 month's reserves.Hope this helps.

Does negligence equate to an emergency?

On the risk mitigation front, no matter the market or how strong it looks, I always assume that it will crash the day after I close escrow, and if that would put me into serious financial trouble, I'm not closing ... and as your example on PHX and your buddy's 4-plexes illustrates, cash flow is not some magic wand that single handedly makes you immune from any and all risks (as some newbies seem to think), though it is an important part of the equation, and the quality of that cash flow is every bit as important as the quantity.

I can't imagine they would do this, but they don't seem to be playing by the rules so this is the part of the equation that has me tempted to walk from the deal.  

Hard money, first deal, sellers market, MLS; I don't see the winning equation in that.Save up 20%, save up operating capital, educate yourself....win.

Just so I'm clear you are offering an investor too buy you multi-million dollar place where you keep all the equity and they get $200k back on there 2M investment which equates to like .05% interest.

I equate it to a 401K rollover or transfer of stock account to another company.

If we don't add appreciation in the equation, what type of rental property investment can cashflow in SF Bay Area?

But what you need is a way to quantify or value the part of the thing that you are bringing to the equation.