If you stick to affordable housing within the range of what is affordable to a median income, buy right with a healthy down payment, you can mitigate that risk.

Obviously I will do my due diligence to ensure tenants are qualified, but I feel that being in a better area would help to sustain good tenants and healthy rental values.

If the house sells anywhere close to list price I should make a healthy profit.

That mixed with heavy competition has driven property values up, and rightly so in my opinion...competition is the key to a healthy (though frustrating) market.Also consider the situation of a cash investor who is just looking for a tax haven for his/her money.

With all the tax write offs including depreciation it is showing a loss despite healthy positive cash flow.The other LLC contains no properties yet.I should also mention my wife and I are in heavily taxed W-2 jobs.I’ve stumbled across a great flip.

I need to chat with someone who can help me understand the implications of these decisions on my financial health. I

I did it for a few reasons, the rent is my highest ($2700/mo) so the savings were healthy.  

@Tony PryorThat seems very doable if your credit is good and your DTI ratio is healthy.

I've got a pretty healthy sum of money to start with, but I'm really scared of making a wrong mistake.

Fair market rent for my portion of the house is around $2,950/mo.I did part with $109k down payment (including closing costs), but I've been saving for quite some time so I still have some fairly healthy cash reserves, and I'm actually looking get another property within the next 6-12 months (most likely out of my expensive market though).