My target with debt servicing is that my whole portfolio will be able to sustain itself at 50% - 60% occupancy.

If you have high cash in cash returns you can sustain in good and bad markets with high vacancy you still can be cash flow neutral it slightly positive when rents go down you till make mortgage payments.Consider this year one you cash flow 3k house increases in value as you said year two cash flow - 3k and can't make mortgage payments and you lose 100k or you are at least forced to sell at a big loss. 

Yes, that is not sustainable over the long term, but even a slow down would not have a detrimental effect to property owners.Ultimately you should do what is best for you and your family and what helps you sleep well at night. 

I do not believe that rental arbitrage is a sustainable business model. 

Just an idea, perhaps he should calculate the losses attributable to depreciation across all 15 years and hope the losses sustained during the early years (i.e., the years closed due to statute) were all suspended under the passive loss rules so they could carryforward into the present, so when he sells the property those losses are released to offset gain (e.g., gain attributable to full depreciation recapture which it sounds as if he will have no choice but to recognize).

We're in Portland, Oregon and very few cases can you hit the 1% "rule", and if you do you have to be creative.I wanted to share a win today that has been in the making for the past 10 months because I think it is a good example of what a low cap environment looks like and what a solid base hit looks like for those that want to invest in small multifamily deals.Here are the details on the property:9-units in an up-and-coming neighborhood Purchase price: $1,550,000Cap rate: 4.5%Average rent was ~$995 and Owner was paying for garbage and water/sewerWhen we took over we immediately had a couple units turn over, which was great because we wanted to get in there to do some upgrades (we do a lot on the sustainability side that include reducing hazardous building materials, energy efficiency upgrades, bike storage, decreasing utility consumption, etc).

Sustainable underlying fundamentals include population growth and income growth not credit expansion and investor in flows.  3.  

As someone who can explain first hands the downside of quitting your day job to become a full time investor (and I managed to quit right as the market crashed in 2008) you should only quit if the business is completely self-sustaining while also paying you more than you are making at your day job (all benefits included). 

Had they done their homework and avoided the urge of greed, they would have cashed out of the market prior to the peak.Final point is that while cash flow on res. properties is good, and in many cases needed to sustain the property over time, it is not always necessary to have boat loads of $ in reserve but simply enough to cover rainy days which we both know will occur over a sustained holding period.

In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters.The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability.