Still trying to figure that out - probably starting with 4 units, with the goal of compounding quickly if I have a great property management partner.

I dont know how far you looked into the homes but the ones that you are finding to be too cheap may just have a bigger problem than you thought. for example just the other day i talked to an owner that was selling his property for 40 but its appraised value was at 55 a few months ago. well i walked into the house and it has a huge foundation problem such as bowing in the floors and stuff.

I can show you how an Option ARM makes you MORE money than an interest only or amortized once you figure the compounding interest of investing it.

I would say the best bang for your buck will be Millionaire Real Estate Investor by Gary Keller, The Millionaire Next Door, 10X by Grant Cardone, The One Thing, The Compound Effect and The E Myth.  

I calculated the annualized return using the equation for simple interest(multiplied 5.6% by 52/3,) your calculation considered the interest to be compounded.

More info is needed but you might want to try a commercial mortgage brokerage out of Santa Monica called Financial Compound.

I have all four units rented and cash flowing nicely at the moment, and want to tap into the great resources of BP to learn more about what it will take for me to begin really experiencing the compounding effect of equity and cash flow in RE.

I'm not losing anything...I'm compounding my $36k.Why would I want to wait 20 years to get anything back?  

The impact if this compounding effect is staggering. 

Do a "take off" of the materials you think you need (think drywall, take SF of the walls, ceilings, etc. and determine how many you need, how much compound, tape, corners, screws, etc...) and do the math.