Now the problem with online bidding is similar to gambling slot machines; there is an algorithm that balances the win/lose ratio (or so we think). 

For three (and this part is the biggest gamble), I believe SD's future real estate market will continue to perform as it has for the past few decades. 

I'm good with leverage...I'm not Dave Ramsey...but HELOCs for investment properties...that's gambling...and the way Las Vegas builds new luxury hotels....unless you plan for it to be quick bridge money or you plan to pay off property in 6-12 months or something like that where 30year fixed financing would not make sense.

I was not a fan of the large tax break as I felt it was way too large, kind of a gamble, and how much more effective that money could have been if invested locally.  

For a purchase price of <40k this seems like a decent gamble to me, however I wanted to solicit some feedback from anyone who's tried it, or is doing it presently. 

I am in my early twenties…little family responsibilities (yet)….relatively low net worth (compared to some of the guys in this thread lol) and I can certainly afford to take more risk …and “chase higher returns”BUT with that being said….regarding my willingness to “roll the dice”…..since we are talking gambling….I like to look at it a little differently in that I’m placing an asymmetric “bet”. 

I’d go with the short term for cash flow purposes right now now and take the gamble that rates will not increase that rapidly.

Real State is better than gambling for sure!

it's just very risky because you're gambling on that appraisal.another problem you'll run into is that it's very tough to get loans under 100k. 

You can get great cap rates 20% plus in ghetto neighborhoods, and you can get crap cap rates 5ish in desirable neighborhoods where the property might eventually appreciate (investing for appreciation is gambling, don't do that)  So the first question you need to answer is what is you tenant pain in the *** tolerance?