Agreed, buyers are most often looking for the classic 3/2 although here in Florida with the snowbird factor and empty nesters/retirees there is probably a larger market to sell 2 bedroom homes than other places

If you need to factor in property management costs (around 12%) for a rental, do any of you look to make up the difference somewhere else in the deal for a property?

One of my criteria is to get at least $150 cash flow a month on this rental, so I'm worried/curious to see how this increased mortgage payment may/has affected cash flow (leaving out other factors I need to account on the income and expense side). 

What are the important factors I need to consider when buying a co-op?

Another factor is the rental prices aren't making sense, while still continuing to rise.

Hi @Anthony Russell...I like the creativity.I believe IRS rules limit 401K loans to $50K (total), so I assume this would be a limiting factor for you.

We just got the house refinanced also for a $260 a month difference, so now it cash flows at 300 a month after expenses.I think that as long as you factor in the property management into your assessment, you should be fine.

What factors do you think will contribute to increases in the prime rate?

I am going to factor that into the asking price, the homes are older and with the 2 being uninhabitable to factor that into the offer. 

The location would probably be on the bottom of the list of importance, you need to look at other factors such as experience, quality for client service, etc.Second, as a self-employed real estate professional you should consider self-directed Solo 401k, which is much more superior to an IRA for several major reasons, you can read more on this blog post: http://www.biggerpockets.com/blogs/2810/blog_posts...