I intend to start small and, if successfull, gradually build my real estate portofolio up.

A good tenant that pays on time every month, doesn't trash the property, and settles down for a while, is worth their weight in gold.Shop around when looking for insurance and such.

Give weight to his words. 

Yup you'd really have to study your comparables and know the formula from which the appraiser will use to determine value there are three methods:- Comparable sales approach (residential sales , 1-4 unit income properties)- income approach - 5+ units/comm/indus/office- cost approach - unit/special use properties (chruches, very old, etc)Using comparable sales approach which will be given the most 'weight,' with residential 1-4 unit properties and know the most recent sold properties, the differences, the elevation, the location (back corner, T street, culdesac, etc), upgrades, floor plan, sqft, school district, amenties, how recent the sale was, and how much a reasonable buyer in the market has paid for these variables will determine the value of your home to an appraiser.Ultimately if the home will not appraise we will not lend above and the buyer will need to bring in cash to set the new ceiling on comparable sold properties if they are that bold to do so.

If I buy the property and start raising the rents (even gradually), I will probably lose the current tenants.

Then there is the rest of the sea with floating trash that is dead weight that will take you to the bottom.

When I say in the process, I mean we have secured lending, have evaluated and attempted purchase of 1 candidate (couldn't close the deal) and are now moving on to another candidate that we like.I've been reading around the forums about some of the financial evaluations and am working to understand why Net Present Value of free cash flows is not being used more in the evaluation of a property.It is interesting to understand the CoC as an income statement percentage and it is certainly interesting to do some quick calculations with perhaps the 50% rule.But until you take a series of cash flows, discount them by a Weighted Average Cost of capital, and determine if you can clear your next best alternative (stock market, paying down debt), how do you know if you really have a something that will make you money?

If you would like to learn a bit more about this there is a good primer here:MIRRThe biggest thing MIRR solves is assuming the interim cash flows are reinvested at the firm's weighted average cost of capital (WACC) instead of the project-level return.

.- hard backI am looking for someone local to Georgia as the shipping costs on this weight wouldn't make sense so picking up would have to do.

Matthew Marshall - at the time this was property #3, and absolutely the potential rent roll carried a heavy weight.