The most common structure is when the property was as a primary residence, and subsequently converted into rental property, and then sold within the three year window after the date the taxpayer moved out of the property and converted it into rental use. 

The subsequent 5 years had about +400 monthly on cashflow, and selling after 10 years netted around 80k.

Well this is not equities.To me it's more like owning a 7-11 (than owning securities), you need satisfied customers with enough money to buy your products, and you need new customers who need and want your product.There is long term maintenance to keep the asset value (providing the neighborhood does not slide downhill in 20 years and become a crime hole).Realize your cash flow needs to be set aside for things like roof replacements, water heater replacements, etc..., (HUD has a service life list for things).You benefit from loan pay down, natural appreciation over time, and any forced appreciation you can do.You can get depreciation on an asset that appreciates.You lose if you run out of money to pay the mortgage, insurance or taxes, and lower the rental value if you cannot or do not do required maintenance and replacements to stay current with local current demands.You may face foreclosure, bankruptcy or personal asset dissolution, depending on how your assets are held and how your loan is worded.I don't think you can put a numeric on the risk.To me it seems more like a Zone thing. 

One is totally passive, the other is basically a full time job.There is a sliding scale between "Profit" on one side and "Comfort" on the other, it's your job to be honest and realistic with yourself about where in that scale you fall.For just starting out I would suggest meeting other people in the industry who are both exactly where you are and ahead of you.

Check out the above where it says "property was acquired subsequent to the most recent tax filing" -- obviously that wouldn't be there if the rental income couldn't be used for two full tax years, right?

As the number of repetitions happen, this delay has a very large impact on the growth/numbers when compared to the same timeline in scenario 1.This means the total PV and the total CF in Scenario 1 will be consistently less with every subsequent execution than it would if the original property was sold.when compared to Scenario 2.

They added the big water slides and they are very nice.Encore at Reunion is a hard pass due to their restrictions.

Imagine have a”bad tenant” paying $1,500/mo next year because you let this tenant slide and can’t increase rents to market. 

Should be an easy fix to add a side gate, sliding glass door, french door, or regular exterior door and steps/patio. 

Will slide a lot of exceptions in there if necessary) and your title co. does the city searches for unrecorded code violation stuff, HOA estoppels, etc.