Or in some cases you may pay him less than the $50k, do a loan with him for more than $150k, and pay him on the larger amount while he pays his lower amount to the bank.But now matter how you structure there are a few risks.  

For Property 1: Should I sell this property and transfer the equity into another investment, or should I explore ways to lower the monthly payment and break even or slightly positive on cash flow?

In cheaper markets it is more common to rent LTR (from what I can see, that's why the prices are lower).

With a CoC of 5-5.5%, how are you getting a lower ROI?

So far with the properties that have looked promising we have utilized the calculated NOI / Cap rate to determine the value and every one we have done has come up way lower than the asking price and in one instance came up less that what the current owner paid for the place initially.

I recently joined BP, and I’m reviewing older questions:FHA Streamline Refinancing is an excellent option for lowering your monthly payments, especially with the potential rate reduction you're seeing.

As you can imagine the recent exits have lower average IRRs than the ones before, but did outperform proforma.We do have to agree with the comments on this string that our earlier exits did benefit from the 'all ships rising' effect.

Other than perhaps property taxes, turnover is generally the biggest single operating expense you will endure as a buy-and-hold real estate investor. And unlike property taxes, it’s something you have a lot of control...

:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

I agree to not spend on points now if you can avoid it, you will probably be refinancing to lower rate anyways in 18-24 months.