I've got a friend with more than $2MM in equity that was on the verge of bankruptcy in 2008 because you can't eat or spend equity. 

We want to create an environment where people can come, eat great food and read great books.

While the income tax is 0% the property taxes are much higher which will eat into your cash flow.

They will all grow up, have families, move to the burbs, buy SUV's and mini vans and eat at red robin.

I do it fully amortizing over 5 years but you could do interest only or amortized over a longer period with a balloon.I've found that if I fully amortize it tends to eat up all of the cash flow/make the property slightly negative cash flow but I like doing that so I'll be in a good equity position in 5 years.Not sure how different this would be in Canada though...

.$25k in materials and laborMonthly holding costs: $557(int payments, taxes, utilities, insurance)House info as purchased:House built in 1971 - Solid B neighborhood - Great Schools2081 sq ft4 Bed, 2.5 BathNew RoofNew WindowsNew HVACVinyl SidingWork to be performed:New cabinets and counter topsLaminate downstairs and carpet upstairsNew vanitiesNew light and plumbing fixtures(tubs staying)New water heater Paneling removed from den and replaced with sheetrockWindow removed from eat in kitchen and replaced with slider to access the back yardSmall deck built off of sliderAnd obviously paint throughout.We will probably price it under market value and hope to sell it quickly(30-60 days) at $125k which would give us a profit(after commissions, closing costs, and carrying costs) of $22k-$23k.  

C) Any problems/issues with having the rentals managed while in the EAT? 

San Diego is an amazing place to live.That being said, it's a pretty terrible place to invest in buy and hold single family if you're looking for cashflow.The people who do buy and hold SFRs in San Diego fall under a few categories in my book:- People who bought back long ago or during the crisis and are able to maintain good rental cashflow- People who are speculating on appreciation and can afford to eat the risk and negative cashflow- People who can't do math

Golfing, Vacation, Out to eat, etc.?)

Eat the rubber chicken or whatever is served and smile.