@J Scott ,,,except, that by calling it a "rule" it is inferred that it is a, well a rule. from Merriam-Webster Dictionary:Rule - a prescribed guide for conduct or action, an accepted procedure, a standard of judgment, a regulating principle, a determinate method for performing a mathematical operation and obtaining a certain result, 

Only after gaining a knowledge and understanding of the legal aspects and the mathematical formulas will you be in a position to be able to decide which aspect of note investing to pursue and be able to properly evaluate individual debt investments.  

Let's run a $500k scenario both extremes, 3.5% down FHA and 20% down conventional.These are CA numbers for things like prop taxes, but the concept should carry over identically.Let's pretend yours is a market where sellers do not frown on 3.5% down FHA, and let's pretend closing costs and/or what you can negotiate with the seller are identical and can thus be ignored.20% down: $100k down, PITI $2600/month.3.5% down FHA: $17,500 down, PITI $3400/month.FHA is $800/month more, but you got to keep $82,500 in your pocket.The FHA scenario where you pay $800/month to keep $82,500 in your pocket is mathematically very close to the following:3.5% down, first mortgage 80% LTV, 2nd mortgage for 16.5% ($82,500) hard money at a rate of 11.6%, interest only.

Good questions, I remember when I took the first CCIM  course,(in the 70's) they talked about the Internal rate of return and other mathematically systems to come up with a rate of return on investment.Well...............I decided if I have to go thru all those calculations to find out how much I was making, I decided I did not have to be all that sophisticated.

I am a recent college graduate in mathematics and, having no desire to work for someone else, I've become interested in real estate.

@Jon Nelson  I'm being super careful with my numbers but obviously as I said, those are just back of the envelope numbers non-withstanding  the mathematical differences from the mean and the medium home price. 

It's just math.HOWEVER, if you (like most people, myself included) don't always act purely rational and mathematical, the psychological benefits that others have described (paying lower balance first) can be worthwhile.AND, if you plan to invest in more things before you retire all your debt, you may want the flexibility that having access to more free cash provides, even if it slows your debt retirement down.

My opinion is that flipping is a numbers game / mathematical equation and that is a strength for me.

REI isn't going anywhere so take your time to learn and grow so the mistakes are smaller, the deals are mathematically sound and true, and the losses are minimized.  

Or are there methods of mathematical analysis that better predict these trends?