Paying UDFI on the leveraged portion of the investment might reduce the return from 15% to 12%.While not as good as 15%, a net after tax return of 12% is still better than 8%.Please realize that these percentages are purely made up to illustrate a concept, not the magnitude of the return differences. 

(a) The provisions of the first sentence of section 1033(b) may be illustrated by the following example:Example:A's vessel which has an adjusted basis of $100,000 is destroyed in 1950 and A receives in 1951 insurance in the amount of $200,000.

The show gives a 'potential' profit but never actually gives a bottom line net number, which many times I look and say they really didn't make any money.I think as illustrated above in the watercooler conversations.

To further illustrate the point and how I'd advise managing it, let's look at another common mistake I hear all the time here on BP.

I would have thrown up the white flag of surrender years ago without more of a goal than making money.That said, like @James Wise has pointed out so illustratively twice, I no longer 'rescue' single mom's from the half-way house.  

As he so beautifully illustrated, the low cap rate in areas like San Diego go a very long way in helping to force appreciation.I saw another poster above comment something along the lines of "Why would you put $420K down for $9,600/year?" 

I have about 14 years before I am forced to make withdraws.For my illustration here I would assume to purchase 4 single family homes ~$100k each.  

The twist was paying full price for it.This thread is a great illustration of the current split I see in our industry.

Using real numbers helped to illustrate it better for me.

Given CapEx being relatively fixed (we know this), and higher rent/purchase price properties being in less favorable C and D areas (pretty constant with very few exceptions), assuming 50% of rent for expenses for a SFH is a bit silly.Let me give you a simple example to illustrate this.