I seem to remember her saying something like home office expenditure is an audit red flag as well.

A few pros: Easier management, lower repairs, lower capital expenditures, quicker turnover between tenancies.A few cons: Special assessments (Not super common in our metro area in large condo projects), more sensitive to economic downturns, more turnover than sfh, rising condo feesI personally own several condos in my portfolio, and they are my easiest properties to manage.  

I would also venture to say that funneling all your payments into a HELOC is more likely to result in putting them "out of sight, out of mind", resulting in more expenditures in your day to day life and hurting your overall financial well being.There is no magic bullet or secret strategy when it comes to finances, but a little discipline can go a long way.

Although I currently do not have the numbers to back this up, I have a good feeling from word of mouth and living around the area.I would like to raise capital doing residential and eventually move on to some commercial expenditures.

Bad scenario #1 is having a major capital expenditure once you move into your new houseBad scenario #2 is losing your job and having to live on no incomeReally bad scenario #3 is both happening at the same timeCataclysmic scenario #4 is both happening at the same time with no money because you spent your last dime on the house (also called bankruptcy)

Zach,I had similar feelings about my first rental 4 years ago with several cap expenditures and two rounds of bad tenants in about a 18 months span. 

I still enjoy finding deals that cash-flow, but now PMC costs are part of the monthly expenditure.

It isn't a matter of questioning the percentage of gross rent that I should be saving for those expenditures, nor the raw amount - rather, it's about what upgrades, appliances, physical modifications, etc., truly end up being worth throwing down extra money for in the beginning. 

Then comes the 50% rules which says that typically (it holds true across most markets) that half of that will be expenses (maintenance, property management, vacancies, taxes, capital expenditure, etc).

Using just a round number, let's say it cost $1,000 a month to maintain the property, not doing any Capital Expenditures.