While real estate can provide higher returns, it is subject to market fluctuations and requires active management.

Since they've lowered interest rates to zero, rates have fluctuated a full 2% while the Fed fund rate hasn't moved.I imagine that jumbo rates will be more sensitive.

If you HAVE to put a rule of thumb on it I would say 50% of gross income goes to operating expenses, but again this fluctuates highly depending on the specific property. 

I historically rented to young adults / early 20s, but I've always had a hard time because so much fluctuates with that demographic at that point in their life - people move in and out and it's stressful for those tenants who want to stay.

There just isn't as much fluctuation in the housing prices as in other areas.  

This way, they could generate revenue through service fees and then they were also hedged against interest rate fluctuations.  

Sounds like it really fluctuates depending where you are at.

We're looking at $20k profit which is fairly conservative as we're factoring 7% for back end fees (closing, agent, etc).I grew up in San Diego so I'm familiar with the area and that's why I'm hesitant because I can't identify the fluctuation in price.

Fluctuation, zoning, REzoning, demand, topographical data, etc...To give you simple examples as to how big of a spread between one deed transfer and the next; I have seen land that was bought for 1.25M only to be resold for 80K, a multiparcel that previous owner bought for 500K resold for 5K, etc...Bottom line, in REI land is by far the most rewarding yet the most devastating of investments; and, since you're new to real estate, I think it's best to read about it and do extensive research first and foremost.

The can fluctuate greatly among similar properties in NJ.