This morning I read an article posted on MSN.com regarding whether or not Detroit will receive a government bailout to help improve the diminished economy of the Motor City.  

Profit can ONLY occur when a check is cashed and as such, until you sell the home, the "equity" remains sitting in the walls of the home and that very eqity can diminish over time (depreciation) or increase (appreciation).I don't think any of us have an argument to this.

The carrying costs diminish profits.  

My experience with sending letters to probate properties is the response will greatly diminish after the third letter.

I love the idea that you understand the concept of Return on Equity (ROE) and that as your equity in an investment increases, if your cashflow doesn't keep up then your REO diminishes and you have to make a decision about "moving" your equity into another investment. 

There appears to be diminishing demand for the 4 bedroom townhomes that I'd prefer.  

This tends to diminish what you do today and thus make it difficult to find joy in your work. 

I forgot to mention I have spoken with a few PMs, and although they said you'd see diminishing returns on any number of beds over 4, they didn't seem concerned about being able to rent it out.  

As an example I worry that investors just getting into some TX markets will have diminished returns due to low energy prices. 

Is it a false market in some cases   probably .. if the out of state investor goes off the feed the pressure on those assets would diminish to the local demand which in many areas simply is not very much.the other thing to keep in mind is markets are separated.. you have markets that are being sought after for cash flow but not much flip and fix retail goes on there and if it does its usually locals who don't need a BP presence to resell or talk about their markets.But for the cash flow markets this is the provence of turn key companies and sellers of lower end assets that create returns ( when they work right) that are greater than were other investors live.. thereby creating a demand