You will always want to offer less than that amount though.Since you are a "Banker", I'll leave the number crunching to you.

If the numbers crunch jump on it!!!

You need to think strategically; the desirable houses will be more centrally located when people finally realize that the credit crunch and real estate market is making a come back.3)Real estate in a down market is a long term investment.

Especially since we will be using our personal savings and/or personal LOC's for our out-of-pocket needs, we will require positive cash flow from any property we choose... and our wives certainly will require this as well :D As I am new to this type of number crunching, please let me know if this doesn't make any sense --> I am using the cap rates above as a guideline to tell me if the rental will cash flow.

And you're not in a time crunch. 

Crunch the numbers, it may make sense!   

This is just a rough number crunch, but why hassle with real estate if $4k to $5 per month is your goal?  

As the other wonderful posters before me stated it's really about crunching the numbers (or having an accountant d o it) and having all the raw data in front of you so you can see if it makes sense.

You can crunch numbers till the cows come home and pencil whip a property into submission but if you dont do your homework and know the market you are going to get burned.

Investors will just have to be (or have someone who is) smart and conservative in their number crunching.