Also, focus on 2 years of job/income stability.Class D Properties:Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciationVacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions.

Thank you Eric.In addition to the rental properties, my wife and I have a paid off house, paid off car, and about $1.4m in retirement accounts, brokerages, and savings.We live in a HCOL area and our expenses are $9.5k per month even though we live pretty modestly.I set out initially to have real estate pay for at least some of my expenses in order to give me more freedom and financial security.Is your wife quitting too? 

With zoning changes making California’s real estate market even more attractive, now’s a great time to dive in.

Instead of a traditional down payment, I would give them some money (maybe just to bring the loan back to even).The upside if taken over the loan at the current balance, with some rehab and hopefully getting the front lot back would be a nice ROI. 

You need an income that meets three requirements:Rents increase faster than inflation to offset constantly rising prices.It must be reliable; it continues even during economic downturns.It must last throughout your lifetime.These are all long-term requirements, so the current interest rates are not the major issue.

You can check tools like Niche, Roofstock, Zillow, or even just Google Maps can help you get a feel for neighborhoods and properties. 

I've bought several in the past few years at 8-10 caps and they have decreased already and the market is not even booming yet.

I'm not even sure how salary got introduced into this scenario but I'd prefer to discuss solutions and explore ways to get to the objective. 

There are some very aggressive investors that refi into interest only products to free up even more cash in the short term - this can be much more risky though, so not recommended if you are not very experienced and have large reserves.

The key difference, though, was he spent months carefully getting to know the local architecs, reputable builders, and even a couple of niche design firms that specialize in modern builds for mid- to high-end buyers.