I knew before the building closed escrow that most of the tenants came home from work, took off their shirt and hung their pot bellies over the balcony rails every day as they drank beer (no joke).

Just remember not to juice your numbers up, run your numbers at worst case scenario and see if you can still make money.

Or is it just me trying to juice my returns, haha.

Sometimes we fall a little short, sometimes we fall very short, and throughout the entire process...our books look like we are 1-2 missteps away from going belly up. 

After living in the property for a year and realizing we had unused bedroom, the creative juices began to flow and we finally decided to jump in with the investment.

IF you are not willing or cannot do this, go to the track and bet your money on any horse. 2. call everyone you need to involve in a full circle deal and calculate what the costs are. get at least 3 quotes. 3. input those costs along with your spreadsheet model and your mortgage model. 4. make a decision based on "risk free rate of return" or what you can get with an alternative (reit, funds, mutual funds, gov. bonds, etc) add in your time billed at what ever you get paid (before tax)  add that time estimate to the cost. 5. recognize that you cannot go bankrupt buying a REIT stock but you can go belly up if you real estate purchase gets out of hand. 6.

Ability to purchase with a 10% down vacation home loan allowed me to juice up my cash-on-cash returns, depreciation and principal pay-down.

In a fair and just world, you would be able to walk into your house with a shotgun and tell them to get out in thirty seconds or take a blast in the belly.

Here’s a reasonable example (eg I used realistic assumptions and didn’t try to juice the numbers to prove a point) showing that to pull $25k equity out of every 100k appraised value when you owe 50k of that already, the comparison isn’t 3% vs 5.5%, it’s 3% vs >10%.

So if it goes belly up they have little to no skin left in the game and are like - oh sorry.