It appears that the portion of the increase in prices directly attributable to the hard and soft costs (materials, labor, time, capital, etc) of improving the property are the approximate amount that the indeces are being "inflated" relative to the circumstances of the average, non-rehabbing homeowner.To demonstrate this, let's say I buy a beat-up rehab in an upward market for $200K, put in $75K in all costs, including capital costs, materials, labor, and sell it for $350K net proceeds.

She experienced many cycles and knows(feels) that Real Estate prices in America are going to increase (at least because of inflation)She is not expecting even a payback from the loan, ( she says: don't pay me anything now, after you sell it and make a difference) but we want to give her this 3 % anyways

You keep rents going up slightly to handle inflation but you are not "rent shocking" your tenants.

PILE UP CASH IN INFLATION PROTECTED EASILY LIQUIDATED ASSETS if you want to have the time of your life as an investor in a few years.

Sometimes an investor's view has more substance than the appetite of an agent who may mentally inflate the value (sub-conciously) because moving the property equates to getting paid.I must admit, whole-heartledly...

Are you not slipping back when you factor in inflation ?

Most of the time, they are inflated claims or complete shames.

:)Historically, real estate has tracked inflation, so holding real estate for a long time is more of a hedge against the decreased value of the dollar than it is an automatic wealth builder.Of course, when you combine time with all the other factors you mentioned, that's where the money comes from...

I think paying in cash the first one all the way through and having some room for inflation of costs etc and then adding the second on cash after sufficient cushion has been saved up.

Once you get the Cap rate of a property, you must verify that it is accurate and not inflated due to inaccuracies, inflated revenues, or missing or shorted expenses.