Make sure you budget for the negative year.

I find this to be a leading reason why better situated real estate is often overlooked by investors who are chasing cash flow.

Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

Our property management company is 4 years old and nearly every lead we get is from referrals.

. :)This is especially true if you rely on furnishedfinder.com as your primary lead source (which you shouldn't, but that's another post) as when you make that connection with a prospective resident, you are selling yourself as a landlord as much as you are the property as a place to live.

The closing of this business is what lead me to “double down” on real estate. 

The conversation may lead to some form of "Would you mind if I replace it?"

Please clarify, how many lenders we have "signed up" and how much they "pay" for "leads".

A lot of times the different viewpoints lead to different questions to ask.In regards to your replies:1) I'm no legal expert, but it seems the sections of tax code you mentioned don't consider in-laws to be a personal relationship that would prohibit the transaction.

Or maybe you're great at talking to people and could make cold calls for someone working off a leads list.