I know I'm not planning to sell anytime soon but we can't predict the future so I still factor in the ease of liquidation.I also find that the amount of work that I have to put in buying and maintaining a 4 plex is pretty much the same as a 14 plex.

I think that (absent a Nuclear War) these cycles are somewhat predictable and, by following inventory, one can "see it coming".

Go with either the tried and true 70% rule-of-thumb (and good luck with that in Los Angeles), or the more detailed approach taken by J Scott, or best yet, create a standard spreadsheet with estimates for all your expenses and back out from there.In the end, you’ll get your lunch eaten by using rote formulas without an understanding of either the actual expenses or an accurate way to predict them.

The fact that all fiat currencies are devaluing does not make the dollar a winner.We've built a house of cards and the weather forecasters are predicting high winds.

Building from ground up in a lot of ways is more organized and predictable than a big RENO where you don't know whats behind that 80 year old wall or what the last owner did to the plumbing and electrical.

@Nick B.If you are purchasing notes for the purpose of predictable monthly income, non-performing 2nd's with high CLTV% are probably not the most suitable investment.Also, I am glad you are getting some help here from some pro's on your calculation errors.Take more time to understand how to calculate time value of money equations.

Christopher Thornberg (one of my favorite economists, with a really good track record predicting CA trends), recently said that Bakersfield is one of the fastest growing areas in CA.  

I think they are predicting a 50 basis point decrease at the next meeting.I wouldn't wait too long, though.

For equity, profit, and cash flow splits, avoid "if this, then that" statements, tracking hours, predictions of future values, etc.

Correct me if I'm wrong but the only way to predict the kind of equity the lead has is by looking at the "last sale date" right?