There are investors that do this kind of thing with HUD homes as well.They sign paperwork at closing that they are occupying the property.Another component of this is fraud to a lender on a loan if you say you will be living there.The reason is lenders give certain rates to owner occupants because statistically you will fight much harder to keep a place you live in.If it's just a bad investment it is easier to walk away hence a higher rate and more down.This property from what you said is 2,400 X 12 = 28,800By half is 144,000 at a 10 cap based on 50% costs.The carpet and paint the bank put lipstick on it it appeal to a home buyer living in one unit and driving the price up.On a quad typically you could expect about 8,000 for the siding,4,000 for the roof,6,000 for 4 outside A/C units,if interior bathrooms and kitchens are outdated about 4,500 by 4 units is 18,000,then water heater and heater about another 6,000 total.So conservatively I have about 42,000 in immediate CAPEX.Every areas cost is different so I am just throwing mine out there.Now the other you say 20 quads total is what you need to worry about.If there are a bunch of short sales and foreclosures from vintage 2004,2005 loans then the new purchaser with a cash offer or a small debt service will rent below market to fill quickly and turn more or the same monthly cash as you.So you starting out at 600 rent monthly might go to 550 or 525 in your development.I have seen this happen.I have also seen even if your building is well kept quality tenants do not want to live next to the other buildings where landlords put in suspect tenants to fill up.Also some landlords with high debt service will drop rent instead of repair to keep tenants so they won't spend tens of thousands out of pocket to rehab.

became an unintentional landlord 3 years ago on oct 1st. wanted to share with you the tracked expensed over past 3 years.rent $900, $925, $950, $975 (tenant renewed 10/1/2012 for 4th year)Per month average over 36 months: $626 P/I/PMI $199 HOA$116 Repairs/capital improvements$ 6 Vacancy$ 114 Taxes/Insurance$1062 Total Expenses + debt paymentcurrently -$86/month cash flow(this is why you do not buy a condo &, for newbies, to have reserves for the unknown)

Eliminate what is not working and increase doing what does work to move forward.

Yes I agree there is risk, but when the risk is virtually non existent, it's not worth even speaking about...yes, McDonalds and any restaurant can be at risk for serving HOT coffee and customer spilling such coffee on themselves...lawsuits could abound...but there are way's to virtually eliminate risk, even if a liberal judge on a mission, deciding in favor of a frivolous lawsuit, putting the hammer down on all those greedy and deceitful investors.

We currently use all proceeds from rentals to pay off the little remaining debt on one of the properties.

I'd love to hear people's thoughts on debt vs equity investing and what they prefer and why.I personally like the safety of debt, since things tend to be more clearly defined, as opposed to off the cuff estimates on returns.

Sellers should be thankful they're walking away from a huge debt.

(2) Should I eliminate the coverage B insurance?

Paying for the reports myself, would also completely eliminate the issue of whether or not their check cleared...

After you're "living for free" with your new multifamily, and you hopefully have no frivolous debt (credit cards and loans on depreciating consumer goods), you'll have lots of free cash flow to propel your investing forward.