Appreciation, in particular, is crucial, while cash flow acts as the fuel to keep the property sustainable.Your Scenario with 2% Home AppreciationHere’s how the deal looks using your assumptions:Year 1 Analysis Cash Flow: -$1,123 Initial Equity: $51,000 (assuming a $249k purchase on a $300k market value as per your report).

An alternative is something called Binder. 

Alternatively, if you need liquidity for your San Diego move, explore refinancing options on your current properties to tap into some of that equity.

As you're looking at properties it's best to identify multiple potential replacement properties to give you more opportunities and alternatives. 

Alternatively, I could explore hard money lenders.

This growth fuels demand, drives appreciation, and ultimately makes strategies like BRRRR or cash-out refinancing viable over the long term.

Your goal is to build a passive real estate portfolio (we can discuss what passive means to you), so while I don't condone throwing $100k into a deal without even a basic understanding, alternatively doing so will teach you far more lessons than reading a book will.  

I'd suggest that there is essentially no tax implication for this as compared to your alternatives.

Alternatively, restructure the loan with equity participation for potential capital gains treatment at lower rates.

Are you saying this would be a good alternative to Pace Morby's Sub To program?