Make no mistake, betting on appreciation is not investing, it's speculating.

Best not to speculate on this, have an incident occur, and then find out that you aren't covered.

It is sort of speculative in nature since rates could change over the period until the refi.Current view is this:- paying down mortgage is still mathematically like a bond without taxes, which does increase your net worth faster than keeping the savings in a bank- those extra savings will probably be wiped out by closing costs if you ever refi though, so it isn't a great idea  - if you never refi, you would then lose the advantages of cheap debt at or below inflation for last time period on loan, which wouldn't be worth it- even though paying it down might be better than holding in a bank, it is not better than alternative investments (it is sort of like an unattractive bond investment)  - stock market will be 7-10% nominal even after all risk and volatility factored in, which is clearly better than the 3% mortgage paydown even with capital gains taxes  - if you are a decent re investor, you have skills/opportunities for a much higher return than that with a re investment- Also had not heard David Greene say that @Malcomb Stapel.

That market seems like you make money off of the appreciation side(more speculation) rather than the cash flow perspective.

It's more speculative than I would like.

Speculative/development work is often done along the coast, especially in uber hot areas like Malibu.

There will much debate on this point, but I don't see the market pressures easing up in Seattle for 7 more years, and that's only because I'm not comfortable speculating to that degree.  

My wife and I are starting to dig around for deals, though it seems like people are irrationally buying up things via speculation and banking on appreciation. 

The lender will use actuals and any future financial gains, whether they be through made through rehab/upgrades or through increasing the NOI, are speculative.

. $2000 in rent with a total cost of $285k (235k+50k) is far below a 1% rent to purchase ratio.Of course you may also be a speculator in "hopes" of holding out for appreciation while carrying a negative cash flow, certainly a well known strategy, but "risky" in this market and you better have capital and reserves to carry the losses.If you are after your first deal, I suggest you look elsewhere for better.Keep it up.