The best way to explaining this is for you to download an IRR calculator spreadsheet or build your own simple one and play around with one.For what its worth most deals I deem meeting minimal IRR standards is 13-15% but you have to dig a little deeper to uncover the real placements of cashflows and capitalization events... and then dig even deeper to verify the assumptions such as occupancy, rent increases per year, and what reversion cap rate was used.Again I don't look for IRR cause its manipulated a lot instead I look at total return on a 5 year basis.

@Stephen Chatto  if this is in a small town no chance that he is going to play that game well. 

I played dumb and asked him where he, his wife and infant son were going to live.

The accountant has to play "catchup bookkeeper" for the entire year --- but (s)he gets paid for it apparently...All that being said, there are other advantages to having an additional checking account. 

Something to decide on now is how passive of a roll you want to play in the deals.

So that can not play any part in your decision.

So long term play for appreciation is Dallas, Houston for cash flow.

If they can't/won't accept the increase, they'll move on and you'll find someone else.I don't play around with incremental rent increases stretched out over time.

The common advice is you have to hold on to it for at least a year to to qualify to play it safe though it's not stated in the law.

Any long term leases in play?