Now if that passive income is not there and he is paying off a car with income derived from RE commissions, flips or a day job I would feel much different. 

The first public information is derived from the first NOD (Notice of Default) from the lender to the homeowner.

Not bad.What is the current occupancy, is 100% of the income derived from rents, are tenants responsible for any utilities, where is the complex, what is the current condition of the property, the age, the class, are rents currently at or below market?

Let's take a look at the definition of passive income.Investopedia's definition of passive income is "Earnings an individual derives from a rental property, limited partnership or other enterprise in which he or she is not materially involved."

It is derived from the Universal Commercial Code (U.C.C.3-309(a)(3)).  

But like NAR, they derive revenues from the quantity of members, not the quality.

To derive net operating income for instance, you have to make certain estimates about a property's expenses, vacancy rates etc. all which can vary drastically with each property.

The Price to Rent ratio consists of two MARKET derived numbers, Price and Rent. 

Cool tip derived from a recent local REIA meetup that I'll personally be applying moving forward. 

Lending is a great way to derive income in the real estate sector.