You could spend 10+ years building a 30 property portfolio for example and lose half of the properties in one lawsuit if they're not structures appropriately.

Do you know how much you could lose in a lawsuit from a tenant?

arm lengths transaction one of my wifes old clients calls out of the blue ( one reason I think being an agent is really helpful long term)  anyway he said remember that property you sold me 15 years ago.. well I stopped paying about 7 or 8 years ago.. they never foreclosed and just sent me the deed.. but its in tax default and I need 20k or I am going to lose it in a week..  

I like to make money but more than that I like to prevent losing money. 

Landlords will tend to keep there rent below market, due too being poor business managers, and as a result silently lose thousands, if not tens of thousands of dollars as well as devalue their properties at time of sale.

How much of chunk of that gained equity will I lose just to refinance?

So this is my first time ever buying an investment property.. really nervous and hoping I don't lose money.. here are the factsad says Multifamily (2) Units 2 bed 1 bath 1 bed 1 bathselling for $40kboth units are rented out for total of $1100 ( courtesy section 8 )does it seem like a good deal?

They could not replace the $500K so not losing it is more important than growing it faster than inflation.As someone said, there is no right answer.

Could do a 1031but I would hate to lose this cash cow. 

Or, you can call the big players and see if they're looking for partners, as they get lots of deals brought to their doorsteps.