Eliminate debt, establish a budget, and save.

Selling gets a tax free gain and allows you to be more liquid; keeping it allows you to have once in a lifetime cheap debt and have that leverage on an appreciating asset. 

My occupancy rate is probably as good as anyone, and one thing I do is never have a high debt load then turn that around and award my tenants with rental rates they can't match elsewhere. 

While I do maintain a relatively modest percentage of my assets in money market instruments, corporate debt funds, and high dividend stocks, I remain most comfortable with the investments I specialize in and know best.  

Or do they leverage debt, and use the subsidies to cover the equity needed?

Deduct NEW property taxes after you buyDeduct home insurance costsDeduct maintenance percentage, typically 10%Deduct vacancy+tenant nonperformance percentage(we recommend 5% for Class A, 10% Class B, 20% Class C, good luck with Class D)Deduct whatever dollar/percentage of cashflow you wantNow, what you have left over is the amount for debt service.Enter it into a mortgage calculator, with current interest rate for an investment property, to determine your maximum mortgage amount.Divide the mortgage amount by either 75% or 80%, depending on the required down payment percentage - this is your tentative price to offer.If the property needs repairs, you'll want to deduct 110%-120% of the estimated repairs from this amount.Be sure to also research the ARV and make sure it's 10-20% higher than your tentative purchase price.As long as the ARV checks out, this is the purchase price to offer.It is probably significantly below the asking price.

The denominator in the calculation is your capital/equity and with no debt the return on your existing equity is low.

You can claim to be the best guy in the world at finding and analyzing deals, but when the market turns against you, and you just went all-in, even on the best relative opportunities that market had available at the time, there is nothing you can do to prevent losses, especially if your debt has a maturity date that will force your hand.Timing the market is an interesting concept. 

With a loan, a person takes on a Debt Obligation. 

I am currently unmarried, no kids and recently out of residency with six figures in medical school debt.