@Jon JosephI can not comment on HOW to expand but make sure when you do expand you factor in all the numbers.

They are proving to be problematic, to say the least.Real estate professionals call it TRID, which is short for Tila-Respa Integrated Disclosure.

However, there's no guarantee how long that would be (or at least, I don't have enough knowledge to know--if you know, say, with good evidence, that 2 years from now the prices will drop significantly then waiting is prudent).If there is no real evidence of large, detrimental economic factors going on (war, people moving out of the Bay in masses, an unusual amount of new construction making the supply on houses extraordinarily large for a prolonged amount of time), then there is no reason to assume that the seller's market will swing back to a buyer's market any time soon.The fact remains that the population in the Bay is growing year after year, tech companies are still expanding (to such a point where they are closing down Gold's Gyms, grrr, but that's another story), and this is still a highly desirable place to live.  

My reasoning is pretty easy to follow- 1) Many of the rest of the world's central banks are lowering rates in fact some are going negative.  2) Inflation is currently a non-factor and is expected to be until 2018 given the continuing rout in commodity prices I don't see that turning around any time soon. 3) Labor participation rates are at long term lows.  

Probably best not to be specific about unrelated factors.

Any advice is greatly appreciated.David,Here's what I do for my multi-family buyers:Yes it is hard to estimate for maintenance because of a lot of variablesBut I know its expense is less for more units, for things like 16+ unit buildings, onsite maintenance room for storage materials, onsite employees use less hours to do work ordersSome entities even volunteer their residents to pick up grounds, hence minimizing your maintenance costsIf hdsupply.com accepts your account they specialize in multi-family buildings and you don't have to use man power for delivery or pickups And yes, you can do analysis paralysis but it might help you the bank's formula DCRThe 1031 buyers look at expenses differently Yes there's a number per door, e.g. if the units have been neglected you will spend at least one month's rent in turn ready unit expense    An organized well lubricated team should turn ready units in 2-3 daysPay close attention to the human factor, i.e. low self-esteem employees who will take longer to turn ready units or do work orders with poorly workmanship, theft, etc In capital expenses, concentrate in a few and more expensive to start with, AC, plumbing, electrical

I'm not sure how much flood insurance costs on a duplex or triplex in Galveston, which would be a huge limiting factor potentially.

It's good to note that mortgage insurance is no longer a write off and was never as such for people who made more than 110k AGI anyway (it phased out from 100k to 110k AGI).When considering FHA you should consider that huge upfront MI and the monthly paid annual MI factor of .80-.85% as well.

@Matt Holmer Financing is always a factor in cash flow and needs to be modeled into your long term plan.  

If you can achieve a 5% return within driving distance with a 2 risk factor (risk based on a scale of 1-10) but outside the driving distance you can achieve a 20% return with a 3 risk factor it's wise to at least consider the property further away.