A healthy cash flow is the primary reason why we buy rental homes.

I agree with Bishoy,job growth and steady large employers are key to determining a healthy rental area.Indianapolis,Memphis and Dallas are great because they have affordable properties to buy to rent to steady employees like truck drivers,FedEx,UPS,and air cargo employees whose jobs aren't being shipped to China or anywhere else.Alabama has car and aircraft manufacturers growing and moving in there.North Carolina has techies escaping the high cost of California.God knows everybody is looking to move to Texas for manufacturing what little we still make in America.Georgia has become one of the biggest areas for filming Hollywood movies cheaper.That is where my money is headed in the next 3 years of buying properties.

I don't think there is "most likely scenario".Each note has its own history, behavior and performance.All of the scenarios you mentioned can happen and I run into all of them during the years I am investing in notes, and note status can change on daily basis (a borrower that is working, healthy or married today might change status tomorrow).The tip I can give you is that when you are doing due diligence prior of investing, you should take worst case scenarios and check what will be your profit in such scenarios.If you are well protected and have multiply exit strategies, you will be able to earn even in such scenarios, and of course earn much more in more optimal scenarios.I can tell you 3 things about the note you mentioned - - I like it is a medium term note (13.75 years, not the 20 or 30 years note)- The LTV is very good, so you have good protection here- I think I have read somewhere that statistically there is a higher chance that a note that have once been non-performing will become non-performing again in the future (not sure if this is correct).Good luck,Eran

I always hit the gym and been very healthy.

You want to make sure that you are in a healthy personal finance position before venturing into REI.

This way, I can see if their financial health is improving or declining.

This option does require a healthy amount of capital which seems like you have.Unfortunately, when I was considering this was right before the pandemic broke out so I actually ended up doing Option 3.

I could afford it, and paid it because I have two young children and you just never know.We're very healthy, and almost never see the doctor.

A healthy W2 and a good team in Indy will allow you to keep investing in a market you already know.

Later on, your RE empire will able to stand on its own merit, though they'll still want you to be personally on the hook for the loan.For small 1-4 properties, make sure your DSCRs (Debt Service Coverage Ratios) are healthy on every new acquisition -- they will be if you're buying right.