Assuming 50% of gross rents to rent loss, expenses and capex, that puts my cash flow at about .5% of the purchase price per month -- or about 6% CoC return. 

But more often than not, it is cheaper and easier for landlords to just cut their losses and move on to find a good tenant who pays.

If you do the numbers, the speed and quantity you will be able to do using the partner trumps the loss of revenue due to the sharing of the cash flow.  

Increase retention (meaning up your deductible), but also look at things like putting on hail proof roofing, etc, or go uninsured and maybe increase loss control as well. 

Based on deals I have done, capital gains comes into play and is typically 15% but that also depends on your income and if you had any losses.

All it says is that, on average and across lots of units, long term, about 50% of gross income will be used to pay for expenses, rent loss and capital costs.Whether you will be able to find good deals in your market is completely independent of the 50% Rule."

Jason,I think its a nice idea to think about the tenant because turnover cost and rent loss can eat you up if the PM isn't doing his job.

That's a big paper loss, but does not mean that the loan will be called due.  

So there is a 1600/mo loss in income.

In insurance terms, this is called "mitigating the loss."