The car doesn't even need to be messy, It can be brand new and those new payments are going to reduce their ability to pay the rent on time,and the down payment reduced or eliminated their cushion money, etc.

@Derek Rocco To answer your question and without knowing your entire financial situation, I'd invest in an index fund and focus on getting more money in the IRA/ other tax advantaged accounts.For me personally $20k just isn't enough capital to safely invest in even notes with enough of a cushion to survive one bad asset.Do you have other IRA's, 401ks,403bs that you want to roll into this SD IRA?

Also, doing it this way I have a nice equity cushion built in just in case I need or choose to bail out early as well as positive cash flow in case I need or choose to hold; investments are purposely engineered so that I have lots of ways to win, and not many ways to loose.

This means a substantial cash cushion and substantial cash flow from existing properties.B) The reputation to convince lenders and potentially other investors to invest alongside you when/if bargains do begin popping up.

add in your profit plus 10% for cushion will you make any money ?

Either way, Portland is the driving force in both cases.I believe it is much more advantageous to be a "smart buyer" in Portland, buying properties that make sense with "forced appreciation", creating positive cash flow, a large % of equity and a cushion should the market go down.

We only cleared about 3K...not that much, but she made more and was able to pay off a water bill from the same house that was huge, get her own water and electric turned back on, and have a little cushion until she could land another job.

I don't see any way around this sort of thing except to plan that it IS going to happen when you are looking at cash-flow--I like to build in a cushion well-above what my minimum cash-flow tolerance is for just this sort of thing. 

Something that gives cushion.

Especially if your a cash buyer.. as an alternative if you just want to put 50k to work.. buy a very nice performing note on a 75k asset.. the return will be the same and usually a lot better since your income is consistent. your equity position is better your only risking 50k on a 75k property not putting out 100% which is full value .. no cushion .. so that's one thing.. but really its just buying a quality asset in a quality area.. and the cheapest homes in a given MSA which basically 30 to 50k in Indy that are rent ready that's what those are.. your as stated going to find the bottom of the barrel tenants.. bottom of the barrel tenants give you inconsistent returns and can trash your houses and they move a lot turn over kills landlords just kills them ..