Apparently there is a rule that if you own more than 1 rental dwelling in the same building, the tax rate is classified as commercial as opposed to residential.

Let's assume I'm working in a vacuum, where there is no appreciation, no debt, stable rents, and the 50% rule applies.

You would have to meet the 2% rule and get lucky on the 50% guideline to meet your objective but it is do-able and without any appreciation The rub is that in order to sustain that level of growth on a compounding basis you need to re invest the income at the same rate and also you need reserves.

-Steven the Tax GuyYour guide to IRS laws, rules and regulations.

I wonder how many of his rules can be translated to real estate investing?

David , please excuse my rambling, you asked if your thinking is sound.Check out the 2% 50% rule or guide line .

I look for rents of 1.5% of purchase price at a minimum, and if I'm going that low the utilities need to be tenant paid.The reason for that is given a 25% down payment and current conventional rates, I can achieve a 15% CoC return (using the 50% rule).

Inventories of existing homes for sale have continued to improve over the last two quarters, declining from 3.2 million in the second quarter to 2.4 million in the fourth quarter.

Not sure the rule on posting articles, but I've been following this concept very closely since the RFI announcement in August 2011.

Your rules are sort of OK - the reason I say "sort of" is that I would phrase everything as "Tenant agrees to _______" and then fill in the blank with the concept you are trying to express.